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The difference between variable revenue and variable cost.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The profit a company makes on a product calculated by subtracting its variable revenues from its variable costs. Because variable revenues and costs are largely dependent on the business cycle, a company with a high contribution margin is likely to have an even higher margin during economic expansion.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
The price at which a firm sells its product less the variable cost of producing the product. A company with a large contribution margin is likely to experience substantial profit increases during an economic upswing.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.