If firms are competitive,under what circumstances will labour-market discrimination exist in the long run
A)It is likely to be nonexistent in the long run since any firms with discriminatory preferences will be driven out of the market.
B)It is likely to be nonexistent in the long run since workers who receive a wage less than their marginal product will leave the labour market.
C)It is likely not to be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies.
D)It is likely to be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms.

Question

Quizplus · Accepted Answer

In a competitive market, firms would have an incentive to hire based on productivity and the market wage rate. Therefore, discrimination based on race, gender or any other characteristic may not be a long-term issue. However, discrimination may exist in the long run if customers have discriminatory preferences, such as preferring to be served by a specific gender or race, or if the government maintains discriminatory policies that affect how labor is allocated. In such cases, discriminatory firms would still be profitable and not driven out of the market.

If Firms Are Competitive,under What Circumstances Will Labour-Market Discrimination Exist