Profits:
Profits are the prize for entrepreneurship or organization. Risk-taking and uncertainty-bearing are the main functions of an entrepreneur. Therefore we might consider profit as the reward for the above functions.Gross Profit:
Usually when we speak of profit, we refer to the difference among the net expenses of generating a good and the net revenue from it. However this is gross profit.Gross Profit and Net Profit:
Gross profit comprises besides net profit other things like rent of land, the interest on capital, wages of management and some additional income on account of the monopoly place of a firm. It also comprises some chance gains (i.e., windfall profits). While considering total profit ‘or’ pure profit, we have to remove all the above things from gross profit. The net profit is the reward for risk-taking and uncertainty-bearing that are the main functions of an entrepreneur. The monopolist is the single seller of a commodity for which there are no replacements. As he controls the supply, it is possible for him to make big profits. And this is termed as monopoly profit.
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