The gain made by the sale of a good or service after deducting the value of the labor, materials, rents, interest on capital and other expenses involved in the production of the good or service. Economists define profit as return to (or on) capital investment, and distinguish normal (competitive) and excessive (more than competitive) profit. Profit in the sense of a profit-making or proprietary institution is present when any of the net earnings of the institution inure to the benefit of any individual. The concept of profit is very hard to define operationally or in detail, and unreasonable or excessive profit even more so. It is important to recognize that reasonable profit on investments must vary with the risks involved in the investment. Profit bears a close relationship to the balance of supply and demand, being a measure of unmet demand.
Excess of income over expense. Actually means an increase in assets. The word “gain” is often used in nonprofit corporations as a substitute for the word “profit.”