Monopoly and Profits

Monopoly and Profits So far we assumed that the employer is working under conditions of competition. Under perfect competition, there are no profits in the long-run. Profits must. therefore, be either temporary or monopoly profits. The monopolist is able to control...

Normal Profit

Normal Profit Some writers introduce the concept of normal profits. As Prof. Knight points out, normal profits, belong to the equilibrium state, or to the state in which changes are taking place which can be anticipated and calculated. Of course, it is difficult to...

Conclusion Regarding Theories of Profit

Conclusion Regarding Theories of Profit We have discussed above the various theories of profits. The question arises: which theory shall we accept? How do profits arise? Here we are thinking of not gross profit but net profit. The fact is that in the real world there...

Uncertainty-bearing Theory of Profits

Uncertainty-bearing Theory of Profits The Theory. According to Prof. knight, it is uncertainty bearing rather than risk-taking which is the special function of the entrepreneur and leads to profit. We’ have seen that there are certain risks which are foreseen...

Innovations Theory of Profits

Innovations Theory of Profits In the dynamic changes, which give rise to profits according to the dynamic theory of profits, Joseph Schumpeter has singled out for special treatment the part played by innovations. The daring and the dynamic entrepreneurs continue to...

Dynamic Theory of Pro

Dynamic Theory of Pro No I»rulil ill Slates Mary tate, This theory is associated with the name of the American economist, 1. B. Clark. He says that in a tatic world, where tile size of the population, the amount of capital, tile quantity and quality of human wants,...