The amount added to the cost of a product to determine the selling price.

• A. Discount
• B. Marketing Mix
• C. Markup
• D. Product Life Cycle

Answer: (C)

Markup is the amount added to the cost of a product to set the selling price. This approach ensures the price covers not just the cost but also the desired profit, by expressing that addition as a percentage of cost. For example, with a cost of 50 and a target markup of 40%, the selling price becomes 50 plus 20, or 70. This concept is part of cost-based pricing, where decisions center on covering costs and achieving planned profit. It differs from a discount (which reduces an existing price), the marketing mix (the combination of product, price, place, promotion), and the product life cycle (the stages a product goes through). It’s also helpful to note the distinction between markup and margin: markup uses cost as the base, while margin uses selling price as the base.