Profit is the wealth that one or both suitably involved parties obtain as part of a transaction. In the same way, it is known as any economic benefit that implies greater monetary input from the protagonist after carrying out a financial operation. It can also be taken as the proportion between total income taking out the costs of production, distribution and marketing of a particular product or service.
Profit is generally related to the word loss, since in economics one is followed by the other. So it is always recommended when touching on this topic is that both are discussed at the same time, making clear both the benefits and the expenses that a certain project requires in any business or company that is underway. The profit rate is currently the variable that constantly drives the system to offer better services and more variety, forcing production costs to be reduced. This brings about a series of allusive problems replacing hand work such as this could paralyze the economy and thus profits.
Another term widely used in economics to define profit is economic benefit, which explains the economic process or activity that takes place at the time of obtaining the profit. It is a bit more imprecise than profit since it includes the positive result of those activities measured both in material or "real" and monetary or nominal form, however, some economists differ between profits and profits. Profit, unlike profit, calculates total revenue minus total production costs, which is why it is imprecise. Generally the economic benefit indicates the creation of wealth especially when it comes to the profits of a nation. There are five types of profit, which are:
- Minimum Profit: It is that obtained by the capitalists and that allows them to continue as such.
- Average Profit: Average or general share of profits that capitalists obtain when investing the same amount of capital.
- Extraordinary Profit: It is what some capitalists obtain above the average profit.
- Industrial Profit: That obtained by capitalists who have their investment in some branch of the industrial sector.
- Commercial Profit: That obtained by capitalists who have their investment in the sphere of commerce.
There is also another term that can be named as “son of profit” known as an expression used as a synonym for natural son.
