  The souvenir stand in the picture at the right sells stuff for outrageous prices. We thought this could be useful in illustrating the concept of 'percent markup' from Math 8. We know all about this stuff, so we didn't buy anything. Much.When someone sells something, they sell it for more than they paid for it. This is their profit. The amount they increase the price by is called the 'markup'. The 'percent increase' in anything can be calculated by dividing the actual increase by the original amount. To find the percent markup on an object, you divide: the increase in price by the original amount paid, and express it as a percent. Let's use our stuffed animal as an example.  We have no idea how much the souvenir stand people paid for this quality plush toy, but it was made in one of those foreign countries where they pay their workers 27 cents a day, so we can imagine that it wasn't much. Just for the sake of argument, let's ay it cost them $2.00, when bought in bulk.We paid $5.99 for it (not counting tax). This means that they made $3.99 in profit. The percent markup is $3.99 (the markup) divided by $2.00 (the original price). This works out to 1.995, or 199.5%, or almost 200%. In other words, they charged us an extra two times the amount they paid for it. Standardly, markups can range from just a few percent (for very expensive items), to just about anything. But there are no rules. Quite often, small items that are very cheap to make can be sold here in Canada for much higher prices, so percent markups can be huge. In addition, 'prestige' stores may mark up a price exorbitantly to make you think it's good quality you're buying. Fancy clothing stores do this often ... that same $200 pair of jeans at 'Chez Justine's' with the sewn-in label can be found at Walmart for $79.99. Walmart has no prestige. You pay extra for that! |