EXCESS PROFIT Meaning and
Definition
-
Excess profit refers to the amount of profit that exceeds what is considered to be a reasonable or normal level of profit for a company or industry. It is the surplus or additional profit earned by a business beyond what is necessary to cover its costs, provide adequate returns to shareholders, and maintain competitiveness within the market.
The concept of excess profit is often used in the context of determining fair prices or assessing the performance of a company. It is important to distinguish excess profit from regular profit, as it helps to identify instances where a company may be benefiting from unfair advantages, market inefficiencies, or monopolistic practices.
Excess profit can arise from various factors, including superior management, unique products or services, strong customer loyalty, technological advancements, or market dominance. While it is not inherently negative to generate excess profit, it can draw attention from regulators or create public scrutiny if it is perceived as being obtained through anti-competitive practices or exploitation of market power.
Policy discussions around excess profit often revolve around the need for fair competition, preventing the concentration of economic power, and ensuring adequate consumer welfare. Governments may implement measures like price controls, antitrust laws, or taxation policies to address excessive profits and promote a more level playing field within an industry.
Overall, excess profit refers to the surplus earnings that surpass what is typically expected or deemed reasonable, and its evaluation can have implications for various stakeholders, including consumers, competitors, and regulators.
Common Misspellings for EXCESS PROFIT
- wxcess profit
- sxcess profit
- dxcess profit
- rxcess profit
- 4xcess profit
- 3xcess profit
- ezcess profit
- eccess profit
- edcess profit
- escess profit
- exxess profit
- exvess profit
- exfess profit
- exdess profit
- excwss profit
- excsss profit
- excdss profit
- excrss profit
- exc4ss profit
- exc3ss profit
Etymology of EXCESS PROFIT
The etymology of the word "excess" can be traced back to the Latin word "excessus", which means "a going beyond". It is derived from the combination of the prefix "ex-" meaning "out" or "beyond", and "cedere" meaning "to go".
The word "profit" has its origins in the Latin word "proficere", which means "to make progress" or "to advance". It is a combination of "pro" meaning "forward" and "facere" meaning "to make" or "to do".
When these two words are combined to form "excess profit", the term refers to profits that go beyond what is considered normal or expected. The excess represents an extra amount or surplus, indicating that the profit is higher or more than what is necessary or standard.
Infographic
Add the infographic to your website:
