Which of the following statements regarding discrimination is true ?
Correct answer: B. Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the government requires discrimination
- A. The existence of a wage differential among groups is strong evidence of discrimination in the labour market
- B. Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the government requires discrimination
- C. Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market
- D. Discrimination cannot exist in a competitive labor market
Explanation
In a competitive market, discriminatory employers generally face higher costs and can be undercut, so discrimination may persist only when customers support it or regulation requires it. A wage gap alone does not prove discrimination because groups may differ in skills and job choices.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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