A Competitive Market May Be Consistent with a Discriminatory Wage

question 371

Multiple Choice

A competitive market may be consistent with a discriminatory wage differential if

• A)firms' customers have discriminatory preferences.
• B)the wage differential is explained by a compensating differential.
• C)the wage differential is explained by differences in human capital.
• D)All of the above are correct.

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Definitions:

Online Travel Agency

A web-based platform that allows consumers to book travel-related services such as flights, hotels, and rental cars.

Music Streaming

A service that allows users to listen to music online without downloading it, by means of continuous data streaming.

Idle Production Capacity

Unused or unutilized facility, equipment, or resources in a manufacturing process that could otherwise produce goods or services.

Equipment-based Services

Services that are primarily provided through the use of specialized machinery or equipment, often in sectors like healthcare, construction, or manufacturing.