Profit is uncertain-changes with conditions of demand and supply.
Profit is a residual surplus or income. It is what isleft after deducting rent, wages, interest and all otherexpenses.
Profit is received after the completion of productionand sales. Payment to other factors is made. Totalsales- Total cost of production
Profit can be positive, zero or negative. Rent, wagesand interest are always positive.
Profit is not determined in an entrepreneurialmarket. Rent, wages and interest are determined in therespective market.
Non-insurable risks are responsible for a profitwhich is not the case for determination of rent, wagesand interest.Distinction between gross profit and net profit:Gross profit refers to the total revenue minus the total explicitcost. Gross profit includes implicit cost.Gross profit includes the following items:1.Implicit returns, implicit rent, implicit wages andimplicit interest pertaining to land, labour, and capitalrespectively owned and supplied by the entrepreneurhimself.
Normal profit is included in implicit cost. It is aminimum return for his organizational functions.
Imputed costs such as depreciation of capital assetsand maintenance charges are imputed which areincluded in the implicit cost.Gross profit also includes the reward to an entrepreneur forhis functions like uncertainty bearing, innovations, etc. It also