The total value to society of having garbage removed is greater than the value of baseball games. Why, then, are baseball players paid more than garbage collectors?
A) Garbage removal results in significant external benefits that are not captured in the price paid for garbage removal. As a result, wages of garbage collectors do not reflect their social benefits.
B) There is greater competition in the garbage collection industry than there is in Major League Baseball.
C) Wages do not depend on total values but marginal values. The marginal revenue product of baseball players exceeds the marginal revenue product of garbage collectors.
D) Although the total value of garbage removal is greater than the total value of baseball, wages are determined by average values.
C
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What will be an ideal response?
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