Question

Explain the dynamic surplus theory and risk and uncertainity theory of profit?

Answer 1

Answer:

The dynamic theory of profit was given by J.B Clark. According to the theory, profit can only be attained in a dynamic economy and not if static economy.  In dynamic economy is an economy in which changes take place frequently. Whereas in a static economy there is a possibility of change. There will not be any change in demand and supply. Changes taking place in a dynamic economy are:

1. Number of human wants

2. Methods of production

3. Capital formation in the economy

4. method of organization of the business

5. the size of the population and incomes of the people.