Profit-maximising competitive firms cannot discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets.

Question

Quizplus · Accepted Answer

Discrimination in hiring does not generate any economic benefit for the firm and would only lead to a less efficient workforce. Thus, profit-maximising competitive firms have no incentive to discriminate unless consumers show a willingness to pay more for products produced by discriminatory firms.

Profit-Maximising Competitive Firms Cannot Discriminate in the Hiring of Workers