Markup is the amount added to the cost of something to determine its selling price. When a store buys a shirt from a manufacturer for $10 and sells it for $20, the $10 difference is the markup. That extra money pays for the store's rent, employees, electricity, and hopefully leaves some profit.

Understanding markup helps explain why things cost what they do. A grocery store might add only a small markup to milk because many stores sell it, but a jewelry store adds a large markup to a diamond ring because fewer people buy expensive jewelry and the store has higher costs for security and expert staff.

In another context, markup refers to special codes added to digital documents to control how they look or function. Web designers use HTML markup to tell computers which parts of a webpage should be headlines, which should be images, and which should be links. Think of it like stage directions in a play: the markup itself doesn't appear on screen, but it tells the browser how to display everything correctly.

Business owners have to find the right markup: too high and customers shop elsewhere, too low and the business can't pay its bills. Finding that balance requires understanding both costs and what customers are willing to pay.