Short-run Profit

Definition

Short-run profit refers to the financial gain earned by a firm when its total revenue exceeds its total cost within a limited time period. It considers only variable costs while fixed costs remain constant.

Related terms

Total Revenue: The total amount of money earned from selling a given quantity of goods or services.

Fixed Costs: Costs that do not change with the level of production in the short run.

Marginal Cost: The additional cost incurred by producing one more unit of output.