Markup refers to the amount added to the cost price of a product to determine its selling price. For example, if a store buys a shirt for $20 and wants to make a profit, it might add a markup of $10, selling the shirt for $30. This extra amount helps cover expenses and generate profit for the business. In retail, understanding markup is essential for pricing strategies. Businesses often calculate markup as a percentage of the cost price. For instance, if the markup is 50%, the selling price would be $30 for that $20 shirt. This practice helps ensure that companies remain profitable while offering competitive prices to customers.