contribution margin

contribution margin definition - business

contribution margin

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. Also called net contribution.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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