The competitive labor market model suggests that the persistence of significant employer discrimination requires the owners of the firm to
A)supply capital at a rate of return higher than what they could earn by investing their money elsewhere.
B)supply capital at a rate of return below what could be earned elsewhere.
C)hire a quantity of labor in which VMPL exceeds the wage rate.
D)engage in collusion.

Question

Quizplus · Accepted Answer

The competitive labor market model assumes that employers seek to maximize their profits and will not engage in discriminatory behavior if it leads to a cost disadvantage. If significant employer discrimination persists, it suggests that the owners of the firm are willing to supply capital at a rate of return below what could be earned elsewhere to maintain their discriminatory practices.

The Competitive Labor Market Model Suggests That the Persistence of Significant