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Refer to the figure above. If the labor market works efficiently and workplace standards are managed such that each firm manages risk individually (there is not a set standard) then
Contribution Margin
The amount by which a product's sales revenue exceeds its variable costs, used to cover fixed costs and towards profit.
Marginal Cost
The additional cost incurred by producing one more unit of a product or service.
Incremental Cost
Incremental cost is the additional cost associated with producing one more unit of a product or service.
Operating Cash Flow
Operating cash flow is a measure of the cash generated by a company's regular business operations, indicating the company's ability to generate sufficient positive cash flow to maintain and grow its operations.
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