Superstar actors typically get contracts that specify that they get a percentage of "the gross," the total revenues that the movie brings in
Why might actors want contracts structured that way? Why might producers be willing to agree to that, and how does this make the goals of actors and producers different?
Actors want to maximize revenue with this sort of contract, while producers wish to maximize profit. It is clearly advantageous to the actor, since cost overruns won't impact what they receive. But it might also suit producers, because if actors are interested in maximizing revenue, they have an incentive to promote the movie and try to increase sales (and to do a product job). This might be more of an incentive than a cut of the profits, over which they have less control.
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Common property is
A) property that has mineral or oil deposits. B) a resource that everyone is free to use as much as they want. C) property owned by a group such as a club. D) property that has little economic value.
Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone increases:
A. the average total cost curve shifts downward at all output levels. B. the marginal cost curve shifts upward at all output levels. C. the vertical distance between the average total cost curve and average variable cost curve increases at all output levels. D. the average variable cost curve shifts upward at all output levels.