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Question no. 21613

Within a competitive marketplace, which factor is least likely to drive persistent wage gaps rooted in discrimination ?

Select your answer for: Within a competitive marketplace, which factor is least likely to drive persistent wage gaps rooted in discrimination ?
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Answer: D. the employer

Explanation

Competitive markets penalize firms that discriminate because they ignore cheaper and more productive labor. Profit-maximizing employers lose money if they refuse to hire qualified workers based on bias. Other firms will hire those workers and gain a competitive advantage in the market. Discrimination involves treating individuals differently based on characteristics rather than their actual job performance. Competitive markets rely on the assumption that firms aim to maximize their total profits. Wage gaps are differences in pay between groups that cannot be explained by productivity.

This theory suggests that market competition can help reduce discrimination over the long term. It is important because it highlights the role of incentives in shaping employer behavior. Government policies often address discrimination when market forces are insufficient to eliminate these gaps. Customers can sustain discrimination if they prefer not to interact with certain employee groups. The government can enforce discriminatory laws that prevent fair hiring practices across the industry. All answers are not correct because employers face strong incentives to avoid discriminatory practices.

Subject
Economics
Category
Economics
Topic
—
Difficulty
medium

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