In the market for superstars,
A)earnings reflect pricing power rather than marginal revenue product.
B)small differences in talent get magnified into huge differences in pay.
C)entry and exit rarely occur.
D)product demand is typically highly elastic.

Question

Quizplus · Accepted Answer

In the market for superstars, small differences in talent can lead to significant differences in pay. This is because a slight edge in talent or popularity can result in a disproportionately large share of market attention and revenue, leading to much higher earnings for those at the very top.

In the Market for Superstars