According to the text, what economic principle justifies the high salaries of some Professional athletes?
What will be an ideal response?
Some professional athletes have a very high marginal revenue product. Profit-maximizing firms employ labor if and only if marginal revenue product is equal to or greater than market wages.
You might also like to view...
Cartels rarely succeed for long because they find it difficult to
A) avoid losing the advantages from economics of scale. B) keep marginal costs high and marginal revenue low. C) keep members from offering discounts and new firms from entering. D) keep members from reducing output below the optimal level. E) prevent average cost from falling below marginal cost.
Evidence in support of the efficient markets hypothesis includes
A) the failure of technical analysis to outperform the market. B) the small-firm effect. C) the January effect. D) excessive volatility.