Question

For the first discussion this week, define the concept: Think Profit in your own words.

Answer 1

In simple words, in business activities, profit is the difference between what is earned and what is profit. Profit takes place when the amount earned is higher than the amount spent. If the amount earned is lower than the amount spent, it results in a loss. Therefore, we can say that profit is the additional value created by a business. Profit is essential for the survival of any business. Profit provides resources to the business to invest more and expand its business activities to earn an even higher level of profits. Therefore, profit can create a multiplier effect.