Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Question

Quizplus · Accepted Answer

Profit-maximizing firms focus on reducing costs and increasing profits. Discrimination in hiring can lead to higher costs if it means not hiring the most efficient workers. Therefore, in the absence of consumer preferences for discrimination or government mandates requiring it, competitive firms have no economic incentive to discriminate.

Profit-Maximizing, Competitive Firms Will Not Discriminate in the Hiring of Workers