What is the best definition of profit?

A. Profit is the possible income from producing an additional item.

B. Profit is the price of producing one additional unit of a good.

C. Profit is the additional income gained from selling an additional good.

D. Profit is the financial gain from business activity minus expenses.

The correct answer is D. Profit is the financial gain from business activity minus expenses.

Explanation:

For example a company whose business activity is selling chairs has sold 10 chairs in a month at 10 dollars each which it has bought in 6 dollars (per chair). The company has incurred 5 dollars as admin expenses and had paid 10 dollars to commercial bank as interest. So what is company profit?

Calculation.

The profit will be 25$ as shown below.

Sales (10*10) 100

Purchase (10*6) (60)

Admin expense (5)

Financial expense (10)

Profit 25