Scenario 19-6
The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, whereas unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors.
-Refer to Scenario 19-6. If consumers do not discriminate between biased and unbiased tutoring centers, then
A)price of tutoring must increase in the short run to account for higher cost to biased tutoring centers.
B)competition in the after-school tutoring industry will ensure the difference in wages will persist in the long run.
C)biased tutoring centers will be more profitable than unbiased tutoring centers in the short run.
D)unbiased tutoring centers will be more profitable than biased tutoring centers in the short run.

Question

Quizplus · Accepted Answer

Unbiased tutoring centers, which hire based on cost rather than gender, can employ female tutors at a lower wage due to the existing wage gap. This allows them to operate at a lower cost compared to biased centers that only hire male tutors at a higher wage, making the unbiased centers more profitable in the short run.

Scenario 19-6 the After-School Tutoring Industry Is Competitive, and So Is the Is