# Profit

## Vocabulary

### accounting profit

the amount left over from total revenue once explicit cost is subtracted
$\text{AP}=\text{TR}-\text{EC}$

### cost

the value of resources given up in order to produce a good or service

### economic cost

the sum of explicit and implicit costs

### economic profit

the amount left over from total revenue once explicit and implicit costs are subtracted
$\text{Economic Profit}=\text{TR}-(\text{Explicit Cost}+\text{Implicit Cost})$

### explicit cost

cost involving monetary payment

### implicit cost

the opportunity cost that occurs from allocation of resources for a specific purpose, which cannot easily be assigned a monetary value

### normal profit

the situation when a firm's total costs and total revenue are equal

### opportunity cost

the value or benefit of the next best alternative given up when making a choice

### profit

the amount left over from total revenue once total cost (however defined) is subtracted
$(\text{P}-\text{ATC})\times\text{Q}$

### total revenue

the amount received by producers when selling output
$\text{TR}=\text{P}\times\text{Q}$