Chief Executive Officers (CEOs) are paid more than $100 million per year. Leading entertainers and sports figures make more than $10 million per year. The average physician earns about $200,000 per year. Most professors earn $50,000-100,000 per year. Sanitation workers earn $40,000-50,000 per year.
How do you account for the relative compensation of these different professions? Does it reflect their marginal revenue productivity?
Explain based on the theory of demand and supply in the finished goods and services markets or the product market and the marginal productivity theory of labor demand that you have studied this past week.
