Difference between revisions of "Profit"
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There are different forms of profit in economics: | There are different forms of profit in economics: | ||
| − | *Economic Profit - achieved when the [[Total Cost]] (TC) subtracted from Total Revenue (TR) yields a positive gain. | + | *[[Economic Profit]] - achieved when the [[Total Cost]] (TC) subtracted from Total Revenue (TR) yields a positive gain. |
*Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost. | *Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost. | ||
[[category:accounting]] | [[category:accounting]] | ||
[[category:economics]] | [[category:economics]] | ||
Revision as of 14:10, December 15, 2008
Profit is the excess of total revenue over total cost for a business. Alternatively, it is the return to anyone or anything that engages in an entrepreneurial activity.
There are different forms of profit in economics:
- Economic Profit - achieved when the Total Cost (TC) subtracted from Total Revenue (TR) yields a positive gain.
- Normal Profit - a firm is making normal profit when it makes enough revenue to just cover its day-to-day operating costs. Therefore, it is sometimes viewed as a cost.