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Paying the Simpsons

Oct 7, 2011 • Behavioral Economics, Demand, Supply, and Markets, Households, Labor, Thinking Economically • 190 Views    No Comments

Rather than accept a 45% salary cut, the voices of Bart, Homer, Marge and Lisa have said this might be their last season. Reportedly paying close to $8 million a season to each of the major voices, 20th Century Fox Television said the show had become too expensive. NPR also tells us that Fox might make more money by ending the show than continuing it. The syndication rights alone could be worth close to $1.5 million for each episode.

In a counter offer that Fox rejected, the Simpsons’ actors said they would accept a 30% cut and a share of the profits. Meanwhile, producers for the series have agreed to pay cuts. A final decision might be announced today.

The Economic Lesson

The Price of Everything, a very good book, explains high salaries. One possibility is the huge audience that technology facilitates. More people mean more money. Here, a University of Chicago economist discusses the rationale and math behind superstar salaries. He even compares Luciano Pavarotti to Mrs. Billington, an 1801 superstar Italian opera diva.

An Economic Question: Through a demand and supply graph for a superstar, how might you illustrate a high salary?

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