Scenario 19-2
Assume that the labour market for mechanics is competitive and that it is differentiated into two groups: male and female.Assume that the mechanics in this market have vehicle repair ability regardless of whether they are male or female.Currently, the equilibrium wage in the female market is lower than in the male market.Further assume that the market for vehicle repair is competitive.
-Refer to Scenario 19-2.If consumers do not discriminate between male and female mechanics,what will result
A)The equilibrium wage in both markets will be identical because of competitive pressure in the market for vehicle repair.
B)The "female" market will eventually fall.
C)The equilibrium wage in the "male" market will eventually rise.
D)The equilibrium wage in the market for mechanics will not be reached.

Question

Quizplus · Accepted Answer

In the absence of discrimination against female mechanics by consumers, competitive pressure in the market for vehicle repair will eventually result in the equilibrium wage in both male and female markets being identical. This is because high-skilled mechanics will be attracted to the lower-paying female market, driving up wages until they reach equilibrium levels.

Scenario 19-2 Assume That the Labour Market for Mechanics Is Competitive and Competitive