PROFIT BY G Labham KR IRS 151122
Lābha (लाभ) refers to an “increase” [=“acquisition”?], according to
the Bṛhatsaṃhitā (chapter 8)
<https://www.wisdomlib.org/hinduism/book/brihat-samhita/d/doc226724.html>,
an encyclopedic Sanskrit work written by Varāhamihira mainly focusing on
the science of ancient Indian astronomy astronomy (Jyotiṣa).—Accordingly,
“The years of Jupiter (*bṛhaspati*) take their names from the several
Nakṣatras in which he reappears after his conjunction with the Sun; and
these names are identical with the names of the lunar months. [...] In the
Māgha year of Jupiter, there will be an increase in respect to fathers; all
creatures will be happy, health and rain will prevail over the land; the
price of food grains will fall and mankind will be more friendly than ever
[i.e., *mitra-lābha*]”. Hence profit is weaved over in our life.
Lābha (लाभ, “greed”) refers to a quality which is renunciated by
the Bodhisattvas, according to the 2nd century Mahāprajñāpāramitāśāstra
chapter X
<https://www.wisdomlib.org/buddhism/book/maha-prajnaparamita-sastra/d/doc225100.html>.
Greed is like a thief; it destroys the root of the qualities (*guṇamūla*).
Just as a heavy frost destroys the five grains, so greed (*lābha*) and
ambition (*yaśas*) destroy the young shoots (*bīja*) of the qualities (
*guṇa*) and prevent them from prospering. Buddhism views thus.
Lābha (लाभ, “gain”) or Lābhāntarāya refers to “gain obstructing
karmas” and represents one of the dive types of Antarāya
<https://www.wisdomlib.org/definition/antaraya#jainism> (obstructing
karmas), representing one of the eight types of Prakṛti-bandha (species
bondage) <https://www.wisdomlib.org/definition/prakriti#jainism>: one of
the four kinds of bondage (*bandha*)
<https://www.wisdomlib.org/definition/bandha#jainism> according to the
2nd-century Tattvārthasūtra chapter 8.—What is meant by gain obstructing (
*lābha-antarāya*) karmas? The rise of which obstructs receiving gifts even
though one is fit to receive and the donor is having the intention and
capacity to donate is called gain obstructing karmas. VIEW OF THE JAINS.
*profit*, in business usage, the excess of total revenue
<https://www.britannica.com/topic/revenue-economics> over total cost
<https://www.britannica.com/topic/total-cost> during a specific period of
time. In economics <https://www.britannica.com/topic/economics>, profit is
the excess over the returns to capital
<https://www.britannica.com/topic/capital-economics>, land
<https://www.britannica.com/topic/land-economics>, and labour
<https://www.britannica.com/topic/labor-in-economics> (interest, rent
<https://www.britannica.com/topic/rent-economics>, and wages). To the
economist, much of what is classified in business usage as profit consists
of the implicit <https://www.merriam-webster.com/dictionary/implicit> wages
of manager-owners, the implicit rent on land owned by the firm, and the
implicit interest on the capital invested by the firm’s owners. In
conditions of competitive equilibrium
<https://www.merriam-webster.com/dictionary/equilibrium>, “pure” profit
would not exist, because the competitive market
<https://www.britannica.com/topic/market> would cause the rates of return
to capital, land, and labour to rise until they exhausted the total value
of the product. Should profits emerge in any field of production, the
resulting increase in output would cause price
<https://www.britannica.com/topic/price-economics> declines that would
eventually squeeze out profits.
The real world is never one of complete competitive equilibrium, though,
and the theory recognizes that profits arise for several reasons. First,
the innovator who introduces a new technique can produce at a cost
<https://www.britannica.com/topic/cost> below the market price and thus
earn entrepreneurial profits. Secondly, changes in consumer
<https://www.britannica.com/dictionary/consumer> tastes may cause revenues
of some firms to increase, giving rise to what are often called windfall
profits. The third type of profit is monopoly profit, which occurs when a
firm restricts output so as to prevent prices from falling to the level of
costs. The first two types of profit result from relaxing the usual
theoretical assumptions of unchanging consumer tastes and states of
technology. The third type accompanies the violation of perfect competition
itself.
Economic profit is often analyzed in conjunction with accounting
profit <https://www.investopedia.com/terms/a/accountingprofit.asp>.
Accounting profit is the profit a company shows on its income statement
<https://www.investopedia.com/terms/i/incomestatement.asp>. Accounting
profit measures actual inflows versus outflows and is part of the required
financial transparency of a company.
Economic profit, on the other hand, is not recorded on a company’s
financial statements, nor is it required to be disclosed to regulators,
investors, or financial institutions. Economic profit is a type of "what
if" analysis. Companies and individuals may choose to consider economic
profit when they are faced with choices involving production levels or
other business alternatives. Economic profit can provide a proxy for
foregone profit considerations.
This theory was propounded by Prof. Marshall. According to
him, *“Profit is equal to the marginal productivity of the entrepreneur. He
has said that the amount which the community is liable to produce with the
help of entrepreneur over and above what it could produce with his help.”*
Recently Stigler and Stonier and Hague have said that “Profit is
the reward of an entrepreneur which is determined by its marginal revenue
productivity, the higher are the profits and lower the marginal revenue
productivity, the lower are the profits of an entrepreneur.”
*Its Criticisms:*
*Important criticisms given by various economists are as follows:*
*a. This theory is based on unrealistic assumptions:*
These unrealistic assumptions are homogeneity of entrepreneurs in an
industry. As entrepreneurs’ efficiency differ, therefore it is not possible
that there will be one marginal revenue productivity curve for all
entrepreneurs. So Profit cannot be same.
*b. This theory fails to determine profit accurately:*
Because efficiency of entrepreneurs differs, systems and methods of doing
work differ, therefore. Profit cannot be calculated accurately.
*c. The concept of marginal revenue productivity of entrepreneurship is a
meaningless concept:*
Because unlike other factors, there can be only one entrepreneur in a firm.
*d. It is one sided theory:*
This theory takes into account only the demand for entrepreneurs and do not
take into account the supply or availability of entrepreneurs.
*e. This is a static theory:*
Where all entrepreneurs earn only normal profits, they have not considered
that the world is dynamic also where some entrepreneurs can earn more than
normal profits.
*f.* This theory has not taken into account the windfall or chance or gain
or even monopoly profits.
KR IRS 151122
<https://www.britannica.com/topic/accounting/Net-income#ref306360>
On Tue, 15 Nov 2022 at 06:50, 'gopala krishnan' via iyer123 <
[email protected]> wrote:
> *PROFIT*
>
> Dear friends,
>
> In today’s cultural QA there was a QA about the profit gained by
> selling a car and answer was about 3-5 percent in general. The dealers
> obtained good profit on spares and services. This kindled me to look in to
> profits in selling some other products. I hope the posting can be
> interesting.
>
> Gopalakrishnan 14-11-2022.
>
> *1. Xerox in shops selling stationery*
>
> About ten years back a stationary shop opened in my area. The only
> stationary shop. Other jobs like Xerox, currier, registration stamp paper
> selling etc. were also done in the shop. Once while talking the owner told
> me- sir, not for the profit, but Xerox and currier keep the shop always
> with customers. Most probably the cheap items nowadays available are
> stationery, comparing to others. Now in my area there are four stationary
> shops, one shop sells small locks, toys, masks, table tennis balls etc. The
> net profit makes them afford to pay the huge rent, and expenses for Xerox
> maintenance etc.
>
> About two days back, I wanted a green pen, I went to the stationery shop
> opposite my home. The owner said, sir, only low cost pen is there, just
> check. I wrote with green pen, it was free ink flowing, I took it. Cost was
> only Rs 5-00.
>
> *2. Diary and high cost.*
>
> Normally from December first week we get diary in shops. The olden days of
> compliment diaries have gone. Most makes calendars and give to known
> persons. The diaries are very much priced. I asked a stationary shop owner
> for the high cost. He replied- Nowadays people writing diaries are reduced
> very much. We are not able to keep different types. *After by February
> middle customers stop for purchasing or complimenting diaries. We have to
> sell them to old paper merchants.* The small pocket size notes 5-10
> pages for each month are only sold later. *Probably they may be keeping
> 100% profit on selling diaries*. I am one of the few writing diaries,
> sometimes I also write diary information 2-3 days together, for one reason
> or other.
>
> *3. Purchases on credit card, debit card and cash payments.*
>
> Now most shops selling things and have payments on cards. So the item is
> sold *including the charges to be paid to credit card authorities.* So
> if one purchase an item by cash, there is no price reduction, the shop
> owner gets more profit.
>
> *4. MRP and selling price.*
>
> MRP is maximum retail price and many sell things even 40% below MRP in
> Chennai. In Kerala most sell on MRP quoting many reasons. *A faucet
> marked MRP 600-00 rupees, we may get around 450-00 in Chennai*. The
> shops sell these things at reduced price maintaining their profit.
>
> *5 Decaying items.*
>
> The shelf life of decaying items is lesser. So the merchants calculate the
> amount paid and profit and charge it for 50% of the quantity. We can see
> in shops slightly decayed items kept in basket for feeding cows. This
> includes items like flowers also.
>
> *Further if there are five shops in a street, there would be slight price
> difference to attract more customers*. For many items to attract
> customers street merchants selling fruits charge different prices.
>
> *6. Fixed prices.*
>
> Many fixed price shops after calculating prices makes a standard
> deduction. In many jewelry shops most ask for some reduction, *the floor
> manager gives the reduction. If at all a person asks no reduction, telling
> the shop gives a % reduction makes the same reduction*. All these are
> after keeping standard profit.
>
> *7. Free curry leaves and coriander leaves.*
>
> Unless there is very scarcity in Chennai shops they are given free. In
> Kerala they are charged. Nothing is free. The price of these are included
> in the price of other items. *If at all one does not ask, he pays for it
> also is the fact.* If any of the above items is abundant, merchant will
> dump much more than what is required. He wants to keep fresh item in the
> next day.
>
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