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/prof"it/, n.1. Often, profits.a. pecuniary gain resulting from the employment of capital in any transaction. Cf. gross profit, net profit.b. the ratio of such pecuniary gain to the amount of capital invested.c. returns, proceeds, or revenue, as from property or investments.2. the monetary surplus left to a producer or employer after deducting wages, rent, cost of raw materials, etc.: The company works on a small margin of profit.3. advantage; benefit; gain.v.i.4. to gain an advantage or benefit: He profited greatly from his schooling.5. to make a profit.6. to take advantage: to profit from the weaknesses of others.7. to be of service or benefit.8. to make progress.v.t.9. to be of advantage or profit to: Nothing profits one so much as a sound education.[1250-1300; (n.) ME < MF < L profectus progress, profit, equiv. to pro- PRO-1 + -fec-, comb. form of facere to make, DO1 + -tus suffix of v. action; (v.) ME profiten, deriv. of the n.]Syn. 1. return. 2. net income. 3. good, welfare, advancement, improvement. See advantage. 4, 9. advance, improve.Ant. 1. loss.
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In business usage, the excess of total revenue over total cost during a specific period of time.In economics, profit is the excess over the returns to capital, land, and labour. Since these resources are measured by their opportunity costs, economic profit can be negative. There are various sources of profit: an innovator who introduces a new production technique can earn entrepreneurial profits; changes in consumer tastes may bring some firms windfall profits; or a firm may restrict output to prevent prices from falling to the level of costs (monopoly profit).* * *
in business usage, the excess of total revenue over total cost during a specific period of time. In economics, profit is the excess over the returns to capital, land, and labour (interest, rent, and wages). To the economist, much of what is classified in business usage as profit consists of the implicit wages of manager-owners, the implicit rent on land owned by the firm, and the implicit interest on the capital invested by the firm's owners. In conditions of competitive equilibrium, “pure” profit would not exist, because the competitive market would cause the rates of return to capital, land, and labour to rise until they exhausted the total value of the product. Should profits emerge in any field of production, the resulting increase in output would cause price declines that would eventually squeeze out profits.The real world is never one of complete competitive equilibrium, though, and the theory recognizes that profits arise for several reasons. First, the innovator who introduces a new technique can produce at a cost below the market price and thus earn entrepreneurial profits. Secondly, changes in consumer tastes may cause revenues of some firms to increase, giving rise to what are often called windfall profits. The third type of profit is monopoly profit, which occurs when a firm restricts output so as to prevent prices from falling to the level of costs. The first two types of profit result from relaxing the usual theoretical assumptions of unchanging consumer tastes and states of technology. The third type accompanies the violation of perfect competition itself.* * *
Universalium. 2010.
