With the place of the business man established in modern industry, we may now turn to the nature and source of the distributive share which goes to him for his services.

The enterpriser, we have seen, enters into a contract to pay definite amounts to land, labor, and capital for assisting him in his enterprise. Eventually, when the product is sold, the enterpriser is in a position for the first time to strike a balance between what he has paid out and what he has received. If the latter exceeds the former we say that he has made a profit. Otherwise, unless the two items are exactly the same, which is unlikely, we say that he has made a negative profit - that is, suffered a loss. Obviously, then, profits arc residual. They are what is left over after all other shares in distribution have been paid. They stand exposed to every fluctuation in the size of the payments for raw materials and to the three factors of production.