DYNAMIC THEORY OF PROFIT

• MEANING AND DYNAMIC THEORY OF PROFIT

• MICRO ECONOMICS
• SHASHI AGGARWAL ECONOMICS AND LAW CLASSES
• MICRO ECONOMICS/BUSINESS ECONOMICS
• DYNAMIC THEORY OF PROFIT
  
  

1. GIVEN BY PROF. J.B.CLARK
2. PROFIT IS A DYNAMIC SURPLUS THAT ARISES ONLY UNDER DYNAMIC CONDITIONS.
3. NO PROFIT UNDER STATIC CONDITIONS
4. NO RISK OR UNCERTAINTY
5. EACH FACTOR GETS REWARD EQUAL TO MARGINAL PRODUCTIVITY
6. ONLY NORMAL PROFITS ARE AVAILABLE
7. THE ENTIRE NATIONAL PRODUCT IS DISTRIBUTED AMONG THE FACTORS
8. ENTREPRENEUR GETS NORMAL PROFIT
9. DISEQUILIBRIUM CAUSED BY CHANGES IN A DYNAMIC ECONOMY IS MAINLY RESPONSIBLE FOR THE ORIGIN OF PROFIT.

• 
  
• 
  
• DYNAMIC THEORY OF PROFIT
• ACCORDING TO CLARK COMPARATIVE STATIC SITUATION IS FOUND

1. CHANGE IN QUANTITY OF DEMAND
2. CHANGE IN THE PATTERN OF DEMAND
3. CHANGE IN THE QUANTITY OF CAPITAL
4. CHANGES IN THE TECHNIQUE OF PRODUCTION
5. CHANGES IN THE NATURE OF BUSINESS ORGANIZATION

• ON ACCOUNT OF CHANGE IN THE POPULATION AND PATTERN OF DEMAND THERE WILL BE INCREASE OR DECREASE IN THE QUANTITY OF DEMAND. IN SIMILAR WAY THERE CAN BE CHANGE IN PRODUCTION AND INCREASE IN STOCK OF CAPITAL CAUSE INCREASE OR DECREASE IN QUANTITY OF SUPPLY.
• THERE WILL ALSO BE CHANGE IN THE COST AND PRICE
• IF AR EXCEED THE COST THERE IS PROFIT OR VICE VERSA

• CRITICISM
• ALL KINDS OF CHANGES DID NOT GIVE RISE TO PROFIT
• CHANGES ARE OF TWO TYPES:-

1. ANTICIPATED CHANGES
2. UNCERTAIN CHANGES

• ACCORDING TO KNIGHT UNCERTAINTY THEORY OF PROFIT IS MORE USEFUL
•