Jerry Seinfeld compares telling a joke to attempting to leap a metaphorical canyon, taking the audience with him. The set-up is the nearside cliff, and the punchline is the far side. If they're too far apart, the listeners don't make it to the other side. And if they are too close together, the audience just steps across the gap without experiencing any exhilarating leap. The joke-hearer gets far more pleasure from the joke if he or she has to do a little work.
That's part of why testing out a joke in front of a crowd is so fascinating. You're learning whether or not you're asking the audience to do too much/not enough/just the right amount of work. And only they can tell you that.
And to put a nice bow on it: "Evel Knievel's Famous Snake River Canyon Jump."
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