The superstar effect is that

Question

Quizplus · Accepted Answer

The superstar effect refers to the phenomenon where the demand for a few top players (superstars) in a particular industry, including sports, entertainment or business, is relatively greater than the demand for most other players. This leads to a significant disparity in wages between those few players and the rest of the industry, making it difficult for the labor market to achieve wage equilibrium. Option A is not correct as the supply of superstars is limited and not more elastic than the supply of average players. Option B is not accurate as the problem is not about creating equilibrium wages for the best players but rather the significant wage disparity between top players and the rest of the industry.

The Superstar Effect Is That