Profits

Abstract

The term ‘profit’ is used by a wide number of different people in a number of different senses. In many of these uses it has acquired an emotive character, in either a positive or negative sense. This plurality of meaning has led to the danger of possible confusion or difficulty in any analysis involving profit. It is therefore the concern of this chapter to investigate the economist’s view of profit, stripped of any outside connotations. In this respect we shall be particularly interested in how the economic concept of profit differs from its use in conventional accounting terms. Before embarking on these fundamental differences a few preliminary comments are perhaps in order.