Profit

Vocabulary

accounting profit

the amount left over from total revenue once explicit cost is subtracted
AP=TREC\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
Economic Profit=TR(Explicit Cost+Implicit Cost)\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
(PATC)×Q(\text{P}-\text{ATC})\times\text{Q}

total revenue

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