Easy entry into and exit characteristic of competitive markets is mainly responsible for firms making zero economic profits in the long run.
Profit is defined as the financial benefit obtained when the income generated by a commercial activity exceeds the expenses, costs, and taxes associated with the activity in question.
Profit is the amount of money left over after all expenses have been paid. Gross profit, operating profit, and net profit are the three types of profit. The profit margin demonstrates how effectively a company uses revenue. Profit is the driving force behind capitalism and free-market economies. Profits rise when revenue rises and costs fall.
The profit formula is expressed as a percentage, with all expenses deducted from sales and the result divided by sales.
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