Question

How are the concepts of markup and markdown related to the percent equation?

Answer 1

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Explanation:

Markup is the name given to the difference between a cost price and a selling price:

  cost price + markup = selling price

Markdown is a name given to the difference between a list price or tag price and the actual selling price.

  list price - markdown = selling price

Markup and markdown are actual currency amounts. Often, sellers relate them to the cost price or the list price using percentages. That is, the percentage markup can be figured as ...

  percent markup = (markup)/(cost price) × 100%

Similarly, the markdown may be expressed as a percentage of the selling price:

  percent markdown = (markdown)/(selling price) × 100%

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Additional comments

These representations as percentages are often used because a seller is usually interested in having a specific percentage return on money invested. By making the markup a specific percentage of the cost price, that return can be ensured.

Markdown percentages are often important to a buyer. They look for sales that offer a large percentage discount (markdown), sometimes not paying so much attention to the list price.

Answer 2

Answer:

Markup is how much to increase prices and markdown is how much to decrease prices. If we are given a markdown percentage, we multiply the percentage with the original price to find how much of a decrease we are getting, then we subtract this difference from the original price to find the marked down price.

Step-by-step explanation: