Which term describes the amount added to cost to determine selling price, commonly used in pricing discussions?

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Multiple Choice

Which term describes the amount added to cost to determine selling price, commonly used in pricing discussions?

Explanation:
Markup is the amount added to cost to determine selling price. It can be a dollar amount or a percentage of cost, and its purpose is to cover profit and operating expenses. For example, if a product costs $40 and you add a $10 markup, the selling price becomes $50, and the markup percentage is 10/40 = 25%. This differs from a discount (which lowers the selling price after it's set), a premium (an extra charge for higher perceived value, not necessarily tied to cost), and a tariff (a tax on imports).

Markup is the amount added to cost to determine selling price. It can be a dollar amount or a percentage of cost, and its purpose is to cover profit and operating expenses. For example, if a product costs $40 and you add a $10 markup, the selling price becomes $50, and the markup percentage is 10/40 = 25%. This differs from a discount (which lowers the selling price after it's set), a premium (an extra charge for higher perceived value, not necessarily tied to cost), and a tariff (a tax on imports).

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