the amount a business receives from the sale of an item of merchandise.

The amount a business receives from the sale of an item of merchandise is called the selling price.

Key term

• The selling price is the money the customer actually pays for one unit of a product or service.

• It is what the business receives at the point of sale before subtracting any costs or expenses.

How it fits in

• Businesses start with the cost of the merchandise and add a markup to arrive at the selling price.

• The difference between the selling price and the cost (after other expenses) contributes to profit.

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