What is pure profit? Someone starts a business by opening an account with $30,00 August 1, 2011 and January's bank statement had a balance of...

Pure profit is the accounting profit minus the implicit or opportunity
costs. Let's look at these terms from a practical aspect.

Take the example whereby Jane quits her job and starts a business. The job used to pay
her $60,000 annually. After one year in business, Jane makes sales worth $160,000. Her total
costs amount to $50,000. In this scenario, the accounting profit is $110,000, while pure profit
is $50,000.

Since the pure profit value is positive,
Jane made the right choice by forgoing her monthly salary. She made an extra $50,000 because she
took a risk.

One thing that you need to keep in mind is
that pure profit is theoretical or hypothetical. Most business owners and firms don't consider
opportunity cost as a real expense because there is no accurate way to calculate it.