According to Dr. Ray Batina of Washington State University, zero economic profit is the profit maximization point. At this point, price is equal to marginal cost. This scenario only applies to a perfectly competitive market.Know More
According to Oregon State University, economic profits and accounting profits are different. Accounting profits are the total revenue minus the total costs. Economic profits are total revenue minus implicit and explicit costs. These include opportunity costs, which are costs a business gives up that are not in the budget, such as a salary from another business in lieu of self-employment. Just because a business has zero economic profits does not mean that the business is not turning an accounting profit. In fact, a firm that produces zero economic profits produces an accounting profit, all else being equal. In the short run, some firms do not maintain zero economic profit. At this point, price is less than average total costs.
According to Penn State University's Department of Energy and Mineral Development, in order for profit maximization of a firm to occur, implicit and explicit costs must equal total revenue. Otherwise, the firm loses money or has too little supply and too great a demand to maintain price in the long run.Learn more about Financial Calculations
P & L management stands for profit and loss management and it has become an increasingly desired skill sought out by executive recruiters in executive candidates. P & L Management involves decreasing costs and increasing revenues, which is important for any business regardless of its field or market.Full Answer >
Asset utilization is a ratio used by business analysts to determine how well a company is using its available assets to generate a profit. Asset-utilization ratios are used to determine the profitability of everything from inventory to accounts receivable, sales and total asset turnover.Full Answer >
BBT.com has an example of a profit and loss template for a small business. The website provides a few different examples of profit and loss statements, as well as detailed explanations as to what goes into a profit and loss statement.Full Answer >
An economic continuum is a method of categorizing parts of the economy, starting with those parts closest to the natural environment and flowing to those parts furthest away from it, according to About.com Geography. More developed countries have longer continua.Full Answer >