Profit Economics

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  • Cisco Outlook Underwhelms, Economy Fears Persist

    yahoo.com 3 weeks, 1 day ago

    (Reuters) - Cisco Systems Inc forecast quarterly earnings below Wall Street's expectations, accentuating concerns about global technology spending and the network equipment maker's ability to weather persistent economic weakness. Shares in the company, which relies on government and corporate spending on Internet gear, slid more than 8 percent after hours, despite beating analysts' third-quarter earnings estimates by a penny. ...

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In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an investor or entrepreneur, whilst economic profit is, at least in the neoclassical microeconomic theory which dominates modern economics, the difference between a firm's total revenue and all costs, including normal profit. Economic profit is thus contrasted with economic interest which is the return to an owner of capital stock or money or bonds. A related concept, sometimes considered synonymous in certain contexts, is that of economic rent - economic profit can be considered as entrepreneurial rent. Economic profit in contemporary neoclassical economics should be differentiated from that of the previously dominant school of classical economics and Marxian economics, which defined profit as the return to the employer of capital stock in any productive pursuit involving labor.
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