LABRST 2H03 Lecture Notes - Lecture 8: Marginal Revenue Productivity Theory Of Wages, Marginal Revenue, Marginal Product
16 Apr 2019
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Big 4 leagues: mlb, nba, nfl, and nhl. In ontario they are more important than professional athletes, yet are making less money than them. 3,600 athletes employed under contract in nhl, nlb, etc combined. High concentrations of business among small numbers of sellers are commonly observed in many entertainment services. Think of artists, writers, musicians and actors; or of computer software and patent drugs for that matter. Economies of scale account for why business tends to be so concentrated in these activities. The cost of production (a performance, or the basic invention) is largely independent of the size of the audience; most of the costs are up- front, so average cost is decreasing in consumed output. Large venues and various media allow many paying spectators to observe a sporting event simultaneously, while at the same time enabling teams to exclude nonpaying customers. Few sellers are need to serve the entire market.
