This paper documents that the rise of the aggregate markup in the U.S. economy since 1955 is primarily driven by the expansion and markup dynamics of the services sector. To interpret the evidence, I develop a multi-sector general equilibrium model with imperfect competition and novel non-homothetic preferences, in which household income and sectoral prices jointly determine the income and price elasticities of demand. As a result, markups evolve endogenously in response to income growth and structural transformation. Calibrated to U.S. data, the model replicates key macroeconomic trends between 1955 and 2020—including the rise in markups, the decline in the labor share, the shift toward services, and changes in relative prices—without requiring increased concentration or reduced competition. These findings suggest that rising markups can also reflect broader forces of economic development.