How to calculate a profitable discount (wholesale) using this formula?

Question

Marketing

Explain how the discount is calculated using this formula, what values ​​(absolute and relative%) and where to substitute?
Let's say the cost of the product for the buyer is $50, the cost of this product is $5. What volume of sales should be according to this formula in order to give the client a discount of 25% (desired margin increase = 0)?
Sales volume - income from the transaction or the number of goods sold?
Is the current margin $45? Or should the value be a percentage?
Discount - 25% or 37.5 dollars?
Markup - markup for what? I confuse this value with a margin.
Explain, please.