I had trouble with this kind of question at first too. It seems that when CLEP uses "markup" the meaning is what I had learned as "margin". The meaning that I had understood as "markup" they relate as "cost-based markup" or something like that. So:

Cost to wholesaler C = $20
Wholesaler markup M = 20%
Wholesaler selling price P = C / ( (100-M) / 100 ) = 20 / .8 = $25

Retailer selling price P = C / ( (100-M) / 100 ) = 25 / .5 = $50

Personally, I think it's sad that "margin" and "markup" are being confused and conflated this way, but I guess there's not much I can do about it.