Physicians earn abovecompetitive wages and the best evidence

Physicians earn above-competitive wages and the best evidence of this is the very high annual incomes that some doctors earn

Solution

This can be understood by wage differential theory of microeconomics. Doctors spend more time and money on training. Thus they earn higher wages. Similarly dentists etc require expensive equipment for performing job.. Further they have to work for longer hours. Even they have to work in night. Also not everybody can become a doctor. It needs much skill and intelligence. All These factors explain higher wages of doctors