the amount a business adds to the cost of merchandise to establish the selling price.

The amount a business adds to the cost of merchandise to establish the selling price is called markup.

Quick Scoop

• In business, markup is the difference between the cost of a product and its selling price.

• It is usually expressed as a percentage of cost, and it is how a business covers expenses and earns profit.

In short: Cost + Markup = Selling Price.

Tiny Example

• If something costs 50 and the business wants a 40% markup, the markup is 20, so the selling price becomes 70.

Answer: The term you are looking for is markup.

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