Markup pricing is a simple method used by businesses to determine the selling price of a product. It involves adding a specific percentage, known as the markup, to the cost of producing or purchasing the item. For example, if a store buys a shirt for $20 and applies a 50% markup, the selling price would be $30. This approach helps cover expenses and generate profit. This pricing strategy is common in retail and can vary based on the type of product or market conditions. Businesses often consider factors like competition and customer demand when deciding on the appropriate markup percentage to ensure they remain profitable while attracting buyers.