Profit is a basic concept in market economy.
Profit acts as an incentive mechanism for business investment.
Higher profits provide incentives for business growth.
There is no satisfactory definition of the term profit. Generally profit of a
firm is defined as:
There are various theories of
profit which have been advanced from time to time
regarding the nature of profit in a competitive economy. Almost
all of them differ basically from one another and are inadequate
to explain the actual role of profit in the operation of free
If we look at profits from
socialists point of view, we find that they believe in the
abolition of profits.