Philip Is an Average Contractor in Town, and He Earns

Multiple Choice

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

A) are valued more by the market relative to Billy's and that explains why his income is higher than Billy's.
B) are valued less by the market relative to Billy's and that explains why his income is higher than Billy's.
C) are valued less by the market relative to Billy's and that explains why his income is lower than Billy's.
D) are more expensive because he receives a compensating differential.