The competitive labor market model suggests that persistence of significant employer discrimination
A)should be larger than what currently is.
B)should not be considered at all.
C)requires the owners of the firm to supply capital at a rate of return substantially below its opportunity cost.
D)requires workers to supply labor at a rate below their opportunity cost.

Question

Quizplus · Accepted Answer

The competitive labor market model suggests that for significant employer discrimination to persist, it would require the owners of the firm to accept a lower rate of return on their capital than they could get elsewhere (below its opportunity cost). This is because discrimination incurs costs that reduce the firm's profitability.

The Competitive Labor Market Model Suggests That Persistence of Significant