Why would a wage differential due to discrimination in hiring be unlikely to persist in a competitive labor market?
A)There is a cost advantage for firms that do not discriminate.
B)Workers who are victims of discrimination will eventually drop out of the labor market.
C)Competing firms will hire fewer of the workers who are temporarily victimized by discrimination.
D)Discrimination cannot exist in markets.

Question

Quizplus · Accepted Answer

In a competitive labor market, firms that choose not to discriminate can hire equally qualified workers at a lower cost than their competitors who do discriminate. This cost advantage can lead to higher profits for non-discriminatory firms, making discrimination an economically unviable strategy in the long run.

Why Would a Wage Differential Due to Discrimination in Hiring