Murabaḥah is a term for a sales contract where the buyer and seller agree on the markup, the ratio between the cost of a good or service and what?
Markup (business) Markup is the ratio between the cost of a good or service and its selling price. It is expressed as a percentage over the cost. A markup is added onto the total cost incurred by the producer of a good or service in order to cover the costs of doing business and create a profit. The total cost reflects the total amount of both fixed and variable expenses to produce and distribute a product. Markup can be expressed as a fixed amount or as a percentage of the total cost or selling price. Retail markup is commonly calculated as the difference between wholesale price and retail price, as a percentage of wholesale. Other methods are also used.
Formula pricing In commodities transactions, formula pricing is an arrangement where a buyer and seller agree in advance on the price to be paid for a product delivered in the future, based upon a pre-determined calculation. For example, a packer might agree to pay a hog producer the average cash market price on the day the hogs will be delivered, plus a 2-cent per-pound premium.