$1$st attempt

Trek is an international company with streamlined and partially mechanized production facilities in southeast Asia and Wisconsin. It offers Project One bicycles that users can customize to varying degrees. Customers place their orders for these bicycles on Trek's Website.

Old Field Cycles is a company in Tallahassee, Florida, that makes custom bicycles to the buyer's specification. Each buyer is measured and interviewed about the use of the bike before the design phase is entered. All the work, including design, is done by the owner and is labor$-$intensive. A buyer can request an Old Field bicycle with similar characteristics to a customized Trek Project One and get it for approximately the same price.

Which firm has a higher markup and why?

Choose one:

A$.$ Old Field Cycles$-$Smaller companies are able to mark up their products more, because their customers have more inelastic demand.

B$.$ Trek$-$Its marginal costs are lower, because bicycle design is a fixed cost.

C$.$ Trek$-$Larger companies are able to mark up their products more because their customers have more inelastic demand.

D$.$ Old Field Cycles$-$This company has a lower marginal cost because it measures customers by hand and does not need expensive computer equipment.