What effect do competitive markets tend to have on labour market discrimination?
Correct answerD. They reduce labour market discrimination because non-discriminating firms employ cheaper labour, earn more profit and drive discriminating firms out of the market
Explanation
Discriminating employers pass over cheaper, equally productive workers and so have higher costs. In competition, firms that hire purely on merit undercut them, as Gary Becker argued.
Correct answerC. Every customer must want the good supplied by the best producer, and the technology must exist for the best producer to supply every customer at low cost
Discussion