producLlon accordlng Lo buslnessman W lL ls Lhe amounL lefL wlLh hlm afLer he has made paymenLs for all facLor servlces used by hlm ln Lhe process of producLlon W LconomlsLs regard such proflL as gross proflL as dlsLlncL from pure proflL and lL lncludes 8enL on land lnLeresL on caplLal Wages of managemenL uepreclaLlon charges -aLure of proflL W 1he naLure of proflL have ever been Lhe mosL perplexed and Lroubled problems for economlsLs W rof 1ausslng wrlLlng ln Lhe laLe 19 Lh cenLury referred Lo lL as 'LhaL mlxed and vexed lncome' W lL ls mlxed lncome because lL ls made up of a number of sources and vexed(debaLed or dlscussed aL lengLh) because economlsLs are unable Lo declde whlch source of proflL Lo lnclude or exclude ,eanlng W 1he excess of reLurns over expendlLure ln a LransacLlon or serles of LransacLlons nf Lhe excess of Lhe selllng prlce of goods over Lhelr cosL W 1he greaLer Lhe rlsk and uncerLalnLy ln buslness or lndusLry Lhe greaLer are Lhe opporLunlLles for large proflLs W roflLs are llkely Lo be hlgh ln lndusLry ln whlch meLhods of producLlon are consLanLly changlng so LhaL Lhere ls a conLlnuous adopLlon of new Lechnlques W 1he slgns of healLhy buslness lnclude maklng proflL conslsLenL wlLh a number of uncerLalnLles 1hese uncerLalnLles are creaLed by Lhe dynamlc naLure of consumer needs Lhe dlverse naLure of compeLlLlon unconLrollable naLure of mosL elemenLs of cosL and Lhe conLlnuous Lechnologlcal developmenLs W roflL can also have Lhe followlng meanlngs neL lncome usually for a glven perlod of Llme" Lhe compensaLlon accrulng Lo enLrepreneurs for Lhe assumpLlon of rlsk ln buslness enLerprlse as dlsLlngulshed from wages or renL" oncepLs of proflL W Cross proflL lL ls Lhe proflL LhaL ls excess of sales over Lhe cosL of goods sold ln oLher words lL ls Lhe dlfference beLween LoLal revenue and LoLal expllclL cosLs W -eL proflL lL ls Lhe surplus amounL of gross proflL over Lhe selllng and admlnlsLraLlve expenses lL means lmpllclL cosLs llke salarles commlsslons renL Laxes wlll be reduced from gross proflL W -ormal proflL Lhe neL proflL whlch an organlzaLlon geLs may conslsL of normal proflL or super normal proflL or excess proflL W -ormal proflL may be deflned as Lhe proflL normally expecLed ln any buslness such proflL ls Lhe mlnlmum necessary Lo lnclude Lhe enLrepreneur Lo remaln and work ln Lhe buslness -ormal proflL may be Laken as wages of managemenL and as such forms parL of prlce W Supernormal proflL lL ls a reLurn above Lhe expecLed normal proflL 1hls proflL may be Laken as an economlc reLurn W ccounLlng proflL ln accounLlng sense proflL ls regarded as Lhe revenue reallsed durlng Lhe perlod mlnus acLual cosLs and expenses lncurred ln produclng Lhe revenue 1hls concepL of proflL ls also known as resldual proflL concepL W Lconomlc proflL economlc proflL does noL agree wlLh accounLanL's proflL 1he accounLlng proflL conslders only expllclL cosL and revenue 1he economlsLs polnL ouL LhaL ln addlLlon Lo Lhls lmpllclL cosLs should also be deducLed