The storekeeper bought it for $25. The reason he has the store is to make some money so he can feed his family. The way he does that is to sell things for a little more than he paid for them. The amount he adds on top of his cost is called his "markup".
For this item, he paid $25 to put it in his store, and he decided to sell it for $35.
He marked it up by $10 out of $25.
10 / 25 = 40%.
Percent markup = Final price - initial price / initial price x 100
= 35 - 25 /25 x 100
= 10/ 25 x 100