In What Way Do Competitive Markets Have a "Natural Remedy

question 377

Multiple Choice

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

• A)Governments regulate to resolve problems of discrimination.
• B)Profit-maximizing firms that do not discriminate tend to replace firms that discriminate.
• C)Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels.
• D)Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.

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Definitions:

Production Quota

A limit set on the amount of goods that can be produced, often used by governments to control supply and stabilize market prices.

Support Price

A price level set by governments in order to stabilize or increase prices of specific goods by buying up the supply or providing subsidies.

Demand Curve

A graphical representation showing the relationship between the price of a good and the amount of that good consumers are willing to buy.

Support Price

A price level set by governments in order to maintain the market price of a good or service at a particular minimum level to protect producers.