If a Firm Is in a Competitive Product Market but Practices

question 102

Multiple Choice

If a firm is in a competitive product market but practices discrimination when hiring workers, then it:

• A)will survive, if it increases production and captures a larger market share
• B)will eventually earn zero economic profits
• C)will be less profitable than firms that don't discriminate and may not survive
• D)will survive as long as it is willing to have a smaller market share

---

Definitions:

Impairment Loss

A reduction in the recoverable amount of a fixed asset or goodwill below its book value, recognized as an expense in the income statement.

Profit Margin

The percentage of revenue that remains after all operating expenses, taxes, and costs have been deducted from total sales.

Net Income

The final amount a company keeps as profit after deducting all costs and taxes from its gross revenue.

Marginal Tax Rate

The rate of tax imposed on your income, corresponding to each applicable tax bracket.