Question

A seller buys an item from a manufacturer for $100 and sells it to a customer for $120. which of these terms describes this extra $20?
a. costb. pricec. markup

Answer 1

Markup: The amount added to the cost price of goods to cover overhead and profit.

Answer 2

Answer:

markup

Explanation:

sellers buy items from manufacturers and need a profit whenever they sell a product.  Therefore, they cannot allow the cost price to equal the selling price.  So they add an extra amount, called a markup, to the cost price to arrive at the selling price.