Use the following setup for question
A firm's fixed costs are $10 million.It sets the price at $1800 per unit and has marginal costs of $1,000.
-What is the firm's contribution margin?
A)$1800
B)$800
C)$1000
D)$300

Question

​Use the following setup for question
A firm's fixed costs are $10 million.It sets the price at $1800 per unit and has marginal costs of $1,000.
-​What is the firm's contribution margin?
A)​$1800
B)$800
C)$1000
D)​$300

Quizplus · Accepted Answer

Contribution margin is calculated by subtracting variable costs (in this case, marginal cost of $1,000 per unit) from price per unit ($1,800 per unit). 
Contribution margin = $1,800 - $1,000 = $800. Therefore, the answer is B) $800.

​Use the Following Setup for Question

Use the Following Setup for Question