ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Markup refers to the difference between the selling price of a good or service and its cost. It is expressed as a percentage above the cost. In other words, it is the premium over the total cost of the good or service that provides the seller with a profit. Image: CFI’s Free Financial Analyst Courses.

Detailed explanation-2: -Markup prices can be defined as the increase (by percentage) in the price of a product based on its original cost. Markdown prices are the rate (markdown percentage) decrease in the selling price of a product from its original selling price. The term discount is a more common term to describe markdown prices.

Detailed explanation-3: -Markup (or price spread) is the difference between the selling price of a good or service and cost. It is often expressed as a percentage over the cost. A markup is added into the total cost incurred by the producer of a good or service in order to cover the costs of doing business and create a profit.

Detailed explanation-4: -Margin, or gross margin, is the difference between total sales and the cost of those sales. For example: If total sales equals $1, 000 and cost of sales equals $300, then the margin equals $700.

Detailed explanation-5: -Cost-plus pricing, also called markup pricing, is the practice by a company of determining the cost of the product to the company and then adding a percentage on top of that price to determine the selling price to the customer.