Final answer:
Markup is the amount added to the cost of a product to determine the selling price, aiming to cover production costs and achieve desired profit margins.
Step-by-step explanation:
The term that refers to an amount added to the cost of a product to create the price at which a channel member will sell the product is Markup. A markup is essentially the difference between the cost of a good or service and its selling price, allowing the firm to make a profit. This markup includes not only the cost of production, such as ingredients and overheads like rent and wages, but also the desired profit margin that the firm aims for. Setting the selling price involves adding the markup to the cost price to achieve the final price point that customers are charged.