In a free market wages are determined solely by the forces of demand and supply. The market theory of wages states that wage differentials are due to differences in demand and supply conditions for different occupations. For example the wages of a premier league footballer are higher than the wages of a street sweeper because the supply of individuals with the skills to play premier league football is much more limited than the supply of workers with the skill to sweep streets. Equally the demand for premier league footballers is likely to be much higher than the demand for street sweepers. This is because a star player can generate much higher revenues for the football club through attracting more fans to the ground or club.
lydiajane74 answered the question on July 4, 2018 at 19:55
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