ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -J.B. Clark propounded the dynamic theory of profit in the year 1900. He states that profit is the difference between the price and the cost of production of the commodity. P rofit is the result of progressive change in an organized society.

Detailed explanation-2: -Dynamic theory of profit was advocated by J.B Clark. He stated that profits rise in that of type of economy where the things change. No profits will be generated n the static economy, where everything remains constant.

Detailed explanation-3: -According to Clark five major changes are constantly taking place in a society. They are: (1) Changes in the size of the population, (2) Changes in the supply of capital, (3) Changes in production techniques, (4) Changes in the forms of industrial organisation, and Page 4 (5) Changes in human wants.

Detailed explanation-4: -We know that profit is a dynamic surplus beyond full cost of production. It is defined as the difference between selling price and, hence, total revenue and total cost. In a changeless economy, there does not occur any difference between revenue and cost; price tends to equal cost.

Detailed explanation-5: -theory of economic growth For Clark, development is a process of successive domination by primary (agriculture), secondary (manufacturing), and tertiary (trade and service) production.