What are the functions of profit in an economic system?

Profit plays the following roles in economic systems:

• It provides to entrepreneurs with reward for risk bearing without which he/she could not undertake production
• It can be used for expansion of the business operations
• It can be used for research, invention and innovations
• It encourages efficient allocation of resources. More resources are allocated in the line where profit is highest
• It attracts resource flow in the country by foreign investors who invest in the country to get profit
• It a source of revenue to the government by taxing profit
• It can be used to reward other factors such as capital and land