Question

You notice at a grocery store that avocados are priced at $2 per avocado. You are a farmer who sells avocados to the store, so you know that you sell it to them for $0.3 per avocado.

A.) What is the store’s % markup?

B.) What is the store’s % margin?

Answer 1

(A)

Formula :

% Markup = ((P - C)/C)*100

where P = Price of Grocery store output (avocados at grocery store) = $2 , C = Cost in a grocery store (= price at which Farmer sells Avocados) = 0.3

=> Store % Markup = ((P - C)/C)*100 = ((2 - 0.3)/0.3)*100 = 566.67%

(B)

Formula :

% Margin = ((P - C)/P)*100

where P = Price of Grocery store output (avocados at grocery store) = $2 , C = Cost in a grocery store (= price at which Farmer sells Avocados) = 0.3

=> Store % Markup = ((P - C)/C)*100 = ((2 - 0.3)/2)*100 = 85%