Pure or Net Profit
The tendency among modern economists is to accept the American view of profits as being the reward for purely entrepreneurial functions, i.e., functionswhich cannot be performed by paid employees. The income from risk-taking and gain from bargainin are regarded by some economist s as “IJUre profits” of the entrepreneur as against the “gross profits” which include all the items enumerated above. Pure or net profit is “the amount that accrues to the e.~epreneur for assuming the risk inseparable from all business under the system of production in anticipation of demand.” “It (pure profit) is a payment made exclusively for bearing risk. The essential function of the entrepreneur is considered to be something which only he can perform, This something cannot be the task of management, for managers can be hired, nor can it be any other function which the entrepreneur can delegate. Hence, it is contended that the entrepreneur receives a profit as a reward for assuming final responsibility, a responsibility that cannot be shifted on the shoulders of any one else.
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