Difference between revisions of "Profit"
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'''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. | '''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. | ||
| + | [[File:S-P-profit.jpg|thumb|350px|Profits of 500 largest American corporations, 1935-2009]] | ||
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. | ||
Revision as of 00:28, September 19, 2009
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.