Definition
Economic profit is the profit after accounting for both explicit and implicit costs. Founders reach for it when a vague conversation needs a shared, specific meaning. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
In a Monday review, someone writes Economic profit on the board and restates it: “Profit after accounting for both explicit and implicit costs.” The next move is a test, a cut, or a double-down — not another debate about the word.
Common mistake
Using Economic profit as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Economic life
Period during which an asset provides economic benefits to its owner.
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Economic order quantity (EOQ)
Optimal order quantity that minimizes total inventory costs.
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Economic value added (EVA)
Measure of economic profit that exceeds the cost of capital.
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Economics
Study of how societies use scarce resources to produce and distribute goods.
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