Discount is the term for a price that drops.

Price tags have a language of their own. If you’ve ever wandered through a store and compared two stickers, you might have noticed how a small word can change everything you end up paying. For anyone trying to sharpen math instincts, understanding these words isn’t just about scoring a deal—it’s about reading a problem the moment it shows up in a test or on a worksheet and knowing what each term means in concrete dollars and cents.

Let me explain the four key price words in everyday terms, because when you hear them, your brain should instantly translate them into what happens to the total you hand over at checkout.

Meet the four price words

• Cost: This is what the business pays to get the item in the first place. It’s like the price tag you don’t see on the shelf, the cost behind the curtains. Cost helps answer questions like: “How much did it cost the shop to stock this item?”

• Simple example: If a retailer buys a jacket for $25, that $25 is the cost.

• Markup: This is a price increase added on top of the cost. The seller uses markup to cover expenses and earn a profit, and it’s usually expressed as either a dollar amount or a percentage of cost.

• Simple example: Cost = $25, markup = $15, selling price = $40. Or, markup = 60% of cost (0.60 × 25 = 15).

• Discount: This is a price reduction that lowers the amount a customer pays. Discounts show up as cash-off dollars or as a percentage off the original price. Either way, the final price goes down.

• Simple example: Original price = $100, discount = $20, final price = $80. Or, original price = $100, discount = 20%, final price = $80.

• Markup ratio: This one goes a level deeper. It’s the markup expressed as a percentage of cost. It tells you how big the markup is relative to what the item cost the seller.

• Simple example: Cost = $40, selling price = $50. Markup = $10, which is a 25% markup ratio (10 ÷ 40 = 0.25).

Here’s the thing: Discount is the term that directly describes a reduction in the dollar amount you pay. If a price drops, you’ve encountered a discount. The other terms point in different directions—cost is what the business pays, markup (and its ratio) is how much the selling price is lifted above cost. Now, let’s connect that to a common question you might spot in math tasks or real-life scenarios.

The question that pops up: Which term best describes a price change resulting in a lower dollar amount?

• A. Cost

• B. Markup

• C. Discount

• D. Markup Ratio

The correct answer is C: Discount. A discount is exactly a reduction from the original price, which means the total amount you pay is smaller after the discount is applied.

A quick mental model

Imagine a sweater priced at $60. If it’s discounted by $12, you pay $48. If instead the store says “20% off,” you’d still pay $48 (20% of $60 is $12). Both discounts lead to the same lower dollar amount, but the way you describe what happened differs:

• A fixed amount discount (the $12 off) is a dollar discount.

• A percentage discount (20% off) is a percent discount.

• Either way, because the price goes down, you’re dealing with a discount.

Why this distinction matters beyond the test

Math isn’t just about plugging numbers into a box; it’s about recognizing which word signals which operation in a problem. When you see “discount,” you should expect a subtraction from the original price, or a calculation involving a percent of that price. When you see “cost,” you’re looking at the starting point from the seller’s side, not a change in the price. And if you see “markup” or “markup ratio,” you’re thinking about adding to the cost to reach a selling price, not reducing it.

A practical moment of clarity

Let’s walk through a couple of friendly scenarios to see how it plays out in real life and in math problems:

• Scenario 1: A jacket with an original price of $80 goes on sale for a $15 discount.

• You calculate: 80 − 15 = 65. Final price is $65. That $15 is a dollar discount.

• Scenario 2: The same jacket carries a 25% discount.

• You calculate: 25% of 80 is 0.25 × 80 = 20. Final price is 80 − 20 = $60. Here, the price drops to $60 through a percentage discount.

• Scenario 3: A gadget costs the store $45 (cost), and the seller sets a selling price with a 40% markup on cost.

• Calculate the markup: 0.40 × 45 = 18. Selling price = 45 + 18 = $63. The term you’d use to describe the 63 dollars relative to cost is a markup (expressed as a dollar amount) or a 40% markup on cost (as a ratio).

Tying it back to the test-friendly mindset

When you encounter a word problem that uses one of these terms, a quick mental map helps:

• Is the problem talking about reducing the amount paid? Look for discount.

• Is the problem talking about what the business pays to get the item? Look for cost, maybe with a twist about how that cost affects selling price.

• Is the question about adding to cost to set a price? Think markup or markup ratio.

• Is the emphasis on the percentage added to cost? That’s focused on the markup ratio, unless the problem flips to a dollar amount.

A few micro-practical prompts to sharpen your eye

• If the problem says “the price was reduced by 10%,” that screams discount.

• If it says “the cost is $30 and the item is sold for $45,” you’re looking at a markup of $15 or a 50% markup on cost.

• If the language uses “reduction,” “less,” or “off,” you’re probably dealing with a discount.

• If the emphasis is “percentage of cost,” you’re staring at the markup ratio.

Common mix-ups worth avoiding

• Confusing discount with markdown. In retail talk, a markdown is a price cut, which is a kind of discount. In many problems, the two terms end up playing the same role, but the test-taker should still identify discount as the umbrella term that describes a price drop.

• Mixing up discount rate with final price. A discount rate (the percent off) isn’t the final price—it’s part of the calculation. The final price is what you actually pay after applying the discount.

• Assuming “markup” means the same thing as “discount.” They’re opposite directions: markup adds to cost to set a selling price; a discount reduces the selling price back down.

A touch of strategy for spotting the right word

• Read the first line of a price problem aloud to yourself and circle the action word: reduce, cut, lower, off, or percent off all point you toward discount.

• Identify the baseline: is there a cost stated or implied? If yes, you’re likely dealing with markup concepts on the way to a selling price.

• Separate the business side from the shopper side in your head. The shopper cares about final price; the business side cares about cost and markup decisions.

From terminology to intuition

If you’ve ever negotiated a deal or watched a sale sign swirl with “discount” in big letters, you’ve already felt the math in action. The math is the same whether you’re buying a hoodie or solving a worksheet item in a math-focused session. The beauty of these concepts lies in their clarity: discount is a downward nudge on price, cost anchors what things cost to bring into the world, and markup shows how much value a seller adds above that cost to stay in business.

Bringing it all together

So when you’re staring at a question about price changes and a lower dollar amount, the shortcut is simple: look for discount. It’s the word that signals a subtraction from the original price, and it’s the umbrella under which both fixed-dollar discounts and percentage discounts live. The other terms—cost, markup, and markup ratio—describe where the price comes from or how much is added, not how much the price drops.

If you’re ever unsure, walk the problem through with a tiny equation in your head:

• Original price minus discount equals final price.

• If you’re told cost and you’re asked for selling price, apply the markup.

• If you’re told final price and need to know the discount amount, you can reverse the math to find the percent or dollar value that was taken off.

The shopping aisle of math is full of little revelations like this. The words matter, not just for test questions but for understanding how money moves in the world around you. The next time you see a price tag, listen for the rhythm: cost, markup, discount, or markup ratio. Each one tells a different part of the story.

And if a problem ever winds up in your lane that asks which term best describes a price change that makes the dollar amount smaller, you’ll know exactly what to say. Discount. It’s the clean, crisp sentence in the math book that tells you the price took a little off and left you with something more affordable.

If you want to keep building this intuition, you can collect a few real-life examples—price changes you’ve seen in stores or online—and label them with the corresponding term. It’s a small habit, but it makes the math feel less abstract and a lot more lived-in. After all, math isn’t a museum of static rules; it’s a toolkit for making sense of the world, one price tag at a time.

So next time you’re reading a price problem, pause, listen for the verbs, and let the numbers do the talking. Discount is the word that signals the slide in price, and with that understood, you’ve added a sturdy, practical tool to your math repertoire.