Talk:Profit

message: Could really use an article on the series. No mention of it anywhere on the site.  — Preceding unsigned comment added by 24.172.91.54 (talk) 17:51, 3 September 2013 (UTC)
thread_title:  CNBC's The Profit 

message: On at least that's what the professor in today's econ. class told us.  
Producer surplus = The area above the supply curve and below the set price.
This is different from "Profit".  --Buzoo 04:38, 2 March 2006 (UTC)
replies: text: And what is the supply curve?  For a single firm it is the marginal cost, the cost of producing a unit of output at a particular output level. The summation of all such curves for all firms in a market comprises the market supply curve. The area you speak of, between the supply curve and the market price, is the sum of the difference between marginal cost and price for each unit of output. Assuming continuity, it is the . Strictly talking, the producer surplus is not just profit, because fixed costs are not included in the marginal cost. Instead, the area represents the sum of profit and fixed costs. (More specifically, in the short run we say it is fixed costs and profit. In the long run one does not assume the existence of economic profit, so we say the surplus is economic rent.) Coleca 19:24, 10 March 2006 (UTC)

text: Buzoo is correct. Producer's surplus includes not only the profit of the firm, but the rents of the factor owners. The two are the same only in the special case in which the input supply curves are flat (and therefore factor owners are paid barely enough to bring their factors into use). I have edited the text to remove the false statement. Agemegos 06:42, 26 September 2006 (UTC)
replies: text:  This depends on how you parse Buzoo's comment.  Please read what I wrote above. You will see I agree with your statement, and have no problem removing the producer surplus comment. Rather, I argue with Buzoo's assertion that producer surplus does not equal profit BECAUSE it is the "area above the supply curve and below the set price."Coleca 04:49, 27 September 2006 (UTC)
thread_title: Producer surplus != Profit

message: I take issue with this:
Economic profit is calculated by π = (p x q) - (mc x q) - f
where;
* π = Profit
* p = price per unit
* q = quantity of units sold
* mc = marginal cost
* f = fixed costs
The reason is that marginal cost varies with respect to the quantity produced - marginal cost is the cost of the last good made, not all of them.
Instead, it would be correct to say that profit = revenue (price * quantity) - (average total cost * quantity), however this is seemingly obvious and loses the distinction between fixed costs and variable costs.  I'll update it to include variable costs.  Scott Ritchie 18:27, 1 Jun 2005 (UTC)
replies: text: Many economics texts use mc rather than avc in this equation, not sure why, but i agree with you that avc is more accurate than mc. thanks Bluemoose 21:21, 1 Jun 2005 (UTC)
thread_title:  Calculations of Cost 

message: I read this BBC article about Google.
It says: "Revenues are in line, but it was a big earnings miss". English is not my mother tongue, and even if it would have been, i'm not sure that i would understand that.
What is the difference between revenues and earnings? And profit, for that matter?--Amir E. Aharoni 06:13, 1 February 2006 (UTC)
replies: text: I suspect the BBC article means accounting profit when it refers to earnings. Economists define profit a little differently from the way most people are accustomed, but I suspect you can read this profit article to get a sense for it. Revenue is the flow of money into the firm, say from advertising sales. I imagine they are counting several revenue sources. The earnings are the difference between the revenue and accounting costs of the firm. If I totally botched this, I expect someone will rectify my response. Coleca 00:56, 16 February 2006 (UTC)
thread_title:  Profit vs. earning vs. revenue 

message: I just read this article, which perhaps should be merged with Net income. Anyway, the introduction is quite astonishing, as "profit" definitely doesn't have two definitions. Profit is the net gain of a business, when all its costs have been deducted from its income/turnover, i.e. it's the difference between the price charged for a product or a service and the cost of creating it. Capitalism regards profit as something positive (it's the whole point of Capitalism), while Marxism regards it as exploitation, i.e. something bad. However, both sides define it the same (i.e. agree to what it is), but view it differently and consequently may use different words/explanations as to how it is achieved - just as people who are in favour of the death penalty probably will explain what an execution is differently from people who are against it, although both sides will definitely agree that execution means taking someone's life.So, I think this article should start with the basic definition, i.e. that profit is the difference between price and cost. The Marxist view should definitely be included in the article, as the negative impact of profit it is one of the pillars of Socialism, but it should of course be presented as a criticism of profit, not as a different definition. Also, the article would greatly benefit from using straight English, instead of meaningless bullshit like "All enterprises constitute investments by their owners of capital. The return to owners' capital under competitive competition is the accounting profit and compensates the owner for not being able to make alternative use of their capital." Thomas Blomberg 11:58, 13 March 2006 (UTC)
replies: text: Firstly, feel free to improve the article, secondly profit is defined differently by accountants and economists, I think this is the cause of the confusion. Martin 12:05, 13 March 2006 (UTC)

text: You are sort of right that profit is the net of revenue when costs are deducted. However, what these costs are and how they are handled can differ greatly. Most economists tend to refer to two sorts of profit so they can keep track of the economic profit, whose maximization notionally determines firm's decisions, and the accounting profit, which is what the firm reports but does not include the costs of missed opportunities. This allows economists to say such things as "firms in perfect competition earn zero economic profit in equilibrium" even when same firms may report an accounting profit to shareholders.It is not generally true that profit is the difference between price and cost, though.  Both terms must be more carefully defined. Hence the different definitions of profit. Marxists (and accountants)  are likely to perceive the benefits and costs of a firm's operation differently than mainstream economists. Thus, it is possible, and likely, they will arrive not just at a different perspective of the phenomenon, but a different definition.Coleca 19:31, 13 March 2006 (UTC)
replies: text: Yes, I know that there are a number of different types of profit (gross, net, economic, etc.) but they all are part of the basic definition, i.e. that profit is the difference between price/income and costs - just as the basic definition of a bicycle is a contraption consisting of two wheels, propelled forward by its rider without engine assistance. However, were you to ask bicycle manufacturers and - heaven forbid - bicycle theorists, you're likely to get 15-20 different definitions, which - when you boil them down - still end up saying basically the same thing to the average layman. The difference between the different kinds of profit is which costs that are included, but otherwise they're saying the same thing. None of these definitions claim that profit is something totally different. My main problem with the current article is that the layman who wonders "What does profit mean? Is that the same thing as all the money a company receives?" will be even more confused after having read the article. Every article in Wikipedia should, at least in the introduction, be written in such a way that someone with no prior knowledge of the subject gets a simple, straight explanation. Further down, the article may get into more details, for those interested in finding out more, but even there the language should be kept as simple as possible, for the benefit of the non-expert. Thomas Blomberg 01:51, 14 March 2006 (UTC)
replies: text: Ok, I see your point.  There should be some Platonic ideal of profit, some fundamental concept to which all the various defintions allude.  I agree that the article as it stands is confusing (probably as a result of trying to convey a political message by choosing appropriate definitions.)  I think the most general way of describing profit is net gain. However, there is a wide range of views about what constitutes gain or loss. Ideally, the introduction would explain that different views exist and that these differences are important to interpretation.Coleca 03:43, 14 March 2006 (UTC)
thread_title:  Total rewrite needed! 

message: I have added several paras to clarify a basic problem in Marshallian (neoclassical economics). The key is that exchange involves two diferent people who incur two different costs of production of the same thing. The buyer is someone who would incur a much higher cost if he had to produce it himself (in many cases, he would fail to produce it, or the cost of would be prohibitively high). The buyer is however the producer of something which he is good at producing. He is able to offer a price higher than the marginal cost incurred by the seller, and yet lower than the marginal cost the buyer would incur if he had to produce it. The profit is possible for this divergence between the cost of production of the buyer and the seller. An allocation model cannot have two different people with two different cost functions for the same good, and hence cannot show profit based on differences in costs. 
The extremely crude Marshallian type models are no good in dealing with complex problems. More sophisticated models are needed to deal with problems like different cost functions for the same good. Such models are available in Consistent Economics
Gani 17:14, 28 April 2006 (UTC)
replies: text: Please cite some sources and improve the quality of the language to that of an encyclopedia, or it will probably end up getting removed. Martin 17:18, 28 April 2006 (UTC)
thread_title: Major Addition: The Fallacy of Normal Profit

message: Shouldnt there be something written here about how companies have to report their profits??
discuss??--The penfool 12:24, 29 September 2006 (UTC)
thread_title: Reporting Profit

message: I've suggested the merger because profitability seems to be a minor variant of the concept of profit (just put on a percentage basis).  Unfortunately, it is also a very minor topic in the fringe theory or "Voodoo Finance" topic of so-called technical analysis.  Having profitability go to a "trading system" indicator seems grossly misleading.  Smallbones (talk) 17:20, 6 May 2008 (UTC)
replies: text: moved re:discussion on that talk page. Smallbones (talk) 16:56, 19 May 2008 (UTC)
thread_title:  Mergefrom [[Profitability]] 

message: Profit! redirects here. But adding a ! to any other article or search does not redirect, what's the deal? How to delete this redirect? 89.249.0.170 (talk) 18:08, 25 November 2009 (UTC)
replies: text: That's a meme. 77.127.235.197 (talk) 18:49, 16 October 2012 (UTC)
thread_title:  [[Profit!]] 

message: Some page history that used to be at the title "profit" can now be found at Talk:Profit/Old history. Graham87 12:46, 28 December 2010 (UTC)
thread_title:  Relevant page history