Meaning of profit

• Profit means different things to different people because of their values, attitudes and perceptions.
• There are two views about profit.
• Business profit is the differences between business revenues and its expenses.  Business profit may be gross or net.
• Excess of total income over total expenditure is called business profit.
• Any surplus income that remains after paying remunerations to the suppliers of factors of production like land, labor, and capital is termed profit. An owner of land receives rent, laborers are paid wages and capitalists get interest for supply of capital in the business.
• Economic profit is what remains after both actual expenses and opportunity costs are subtracted from revenue earned. Opportunity cost is the cost of choosing to use resources for one purpose while sacrificing the next best alternative for the use of those resources. The opportunity cost is a measure of everything a person sacrifices to attain an objective.
• The value of using a resource, measured in terms of the value of the best alternative for using that resource is called opportunity cost.
• Opportunity cost is the cost of an action in terms of the alternatives foregone.