1. A merchant buys a product for and then marks it up to sell it. What is the selling price of the item?

To find the selling price, you first calculate the markup amount. The markup is of , which you can calculate as follows:

Next, add the markup to the original price:

So, the selling price of the item is .

It’s interesting to note that markup percentages can be traced back to practices in ancient markets, where traders would increase prices based on local demand and supply. Over the centuries, this practice evolved into the structured methods we use today, allowing merchants to sustain their businesses while adjusting for costs and market fluctuations!

When selling products with a markup, it’s vital to remember to consider other costs like shipping, taxes, or potential returns that could affect profit margins. A common mistake is only factoring in the initial cost without accounting for overhead, which can lead to mispricing the product and reducing profits. Keep a close eye on all these variables!