The meaning of markup in this sentence?

[Thunu]

Business English Lesson, Advanced Level

ESL/EFL Test #107 "Accounting terms", question 8

The ......... is the difference between what a business pays for an item wholesale and what the business sells it for retail.

(a) markup
(b) makeup
(c) makeshift
(d) moreover

Business English Lesson, Advanced Level

ESL/EFL Test #107 "Accounting terms", answer 8

The markup is the difference between what a business pays for an item wholesale and what the business sells it for retail.

Correct answer: (a) markup
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Can you explain the meaning of markup in this sentence, please?

Thank you
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Reach an agreement as ploughing, don't let argument happen at crops.

[Esl_Expert]

Hello Thunu,

The test sentence itself is a definition of the word "markup".

By way of example, let's say I own a supermarket, and one of the things I sell is milk. I might buy milk from a dairy for $2.75 a gallon. ($2.75 would be the wholesale price.) I sell this milk to people who shop in my supermarket. When one of my customers buys a gallon of milk in my store, they pay me $4.00. ($4.00 is the retail price.) In this example, the markup on a gallon of milk is $1.25.

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