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.Competition in the market for vehicle repair is consistent with which statement
A)Firms hiring male mechanics will have a cost advantage, leading to an increase in the demand for male mechanics.
B)Firms that hire only female mechanics will eventually all go out of business.
C)Firms hiring female mechanics will enter the market, increasing the demand for female mechanics.
D)Firms hiring female mechanics will enter the market, decreasing the demand for female mechanics.

Question

Quizplus · Accepted Answer

Since the market for vehicle repair is competitive, firms will enter the market to take advantage of the lower wages of female mechanics. As more firms hire female mechanics, the demand for female mechanics will increase and eventually drive up their wages. Therefore, competition will lead to an increase in demand for female mechanics.

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