Some Relations Between Price, Expenses and Profit

Abstract

In the economical literature and also in practice two methods for determining the profit exist. The first one is with respect to the revenue (profitability in terms of revenue/price) and the second one is with respect to the expenses (profitability in terms of expenses). In the present paper the author makes an attempt to prove that it is an advisable and adequate approach to calculate the profit in terms of revenue/price. In parallel the relation between the changes in pricing and changes different components of determining the total expenses is examined.