A Contribution Margin Is Calculated by Subtracting Variable Expenses from Sales

question 90

Multiple Choice

A contribution margin is calculated by subtracting variable expenses from sales, and represents the amount of revenue that contributes to covering the ____ expenses of a company.

• A) variable
• B) fixed
• C) tax
• D) accounts payable

---

Definitions:

Short Run

A period during which at least one of a firm's inputs is fixed and cannot be changed.

Long Run

A period in economics where all factors of production and costs are variable, and firms can adjust all inputs according to market demands.

Arc Elasticity

A method for calculating elasticity between two points on a demand curve using the midpoint formula.

Wheat Demand

The total quantity of wheat that consumers are willing and able to purchase at a given price level.