Why are celebrities paid such excessive amounts compared to the rest of society?

[Yo, Teach!]

Good question! I am glad that you placed this in economics because this really is an economic question.

To start with, you have to remember that price is set by two forces: supply and demand.
The supply of people who WANT to be famous is almost unlimited. Shouldn't this lead to a low price for celebrities? Well, we need to take a closer look at this first statement.

The actual supply of people who are famous is actually very limited. This is because of the limiting factor of public attention. I think we can all name someone who was once famous, but we haven't heard from in a long time. In fact, VH1 made a whole series called "Where are they now" about these people. So there is a limited supply of truly famous people and they have to fight to stay famous.

So because the demand for famous people is high (TV, Movies, 24-hour news shows, countless magazines, websites, etc.) and the supply is very low, the price is thus set very high and Will Smith can ask for 100 million for a movie.

Remember in economics, it does not matter whether your contribution is 'good' or 'bad,' it only matters whether there is high/low demand and high/low supply