CONCEPT OF PROFIT, PROFIT MAXIMIZING OUTPUT AND BUSINESS LIFE CYCLE - PART 1
Автор: ECOPLUSHABOY
Загружено: 2025-07-04
Просмотров: 634
Описание:
Profit is the net amount a business earns from merchandise which is the difference of total revenue and total cost. Also, the returns on investment is called profit. There are positive, negative or zero profits. Positive profit which could also be termed as supernormal profit, is the excess of total revenue less total cost, but this profit is more that the estimated profit. Also, super normal loss (negative profit) is when the total cost is greater than the total revenue by a large difference. Zero profit is when the total revenue equals total cost and it means the firm breaks even.
Also, the concept of profit is explained using two approaches
1. Business life cycle and
2. profit maximizing output of a firm.
The business life cycle is used using total cost and total revenue approach. It is used to explain profit, loss and break even of a firm.
Also, the profit maximizing output of a firm is explained using marginal revenue and marginal cost approach, and it helps explain the output the firm should produce that would give the most profit to a firm and that output is where MR = MC. For clarity these concepts and more, watch the video for succinct explanations. Thanks.
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