A Perfectly Competitive Market Is Initially in Long-Run Competitive Equilibrium

question 121

Multiple Choice

A perfectly competitive market is initially in long-run competitive equilibrium. Each firm in the market is earning zero economic profit. The owner of one firm decides to discriminate against employees of race X by not hiring them, or by firing those employees of race X who currently work for him. If employees of race X are high-quality employees, and other firms hire them, then the owner of the discriminating firm will soon find that his costs rise (above that of other firms) and he will begin earning

• A)below normal profits, or even losses.
• B)normal profits.
• C)positive economic profits.
• D)above normal profits.

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Definitions:

Reality

The state of things as they actually exist, independent of perception or beliefs.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness and interdependence of the world's markets and businesses.

Workforce Diversity

The inclusion of individuals with a variety of characteristics, such as age, gender, ethnicity, and sexual orientation, in a workplace.

Technological Innovation

The development and application of new technologies or improvements to existing technologies to create novel solutions or enhance efficiency.