00:01
So for this question is really, really important to kind of hone in on that first part of the forces of competition.
00:06
So competition is naturally going to cause firms to drift towards maximizing profit, right? and so each firm wants to make the most money possible.
00:16
So if we're talking about, if we're talking about a, option a, then we're going to see that, okay, firms will, they will eliminate wage differentials from discrimination, because the employers are just trying to maximize profit.
00:34
And so since they want to make the most money, they're going to hire whoever can produce for them.
00:41
And that usually does not have to do with anything of the discriminatory factors.
00:46
Usually it only has to do with human capital, productivity, and who they can hire for the cheapest amount and who can produce the most marginal labor.
00:57
And so this is kind of going back to the whole, wage equals the quantity of marginal product produced.
01:05
So a is the answer here because we're talking about employers just trying to maximize profit.
01:11
So they're going to be on a quest to max out profit.
01:19
Now if we look at option b, we see that, okay, customers.
01:25
So if customers prefer a certain type, and the book gives an example here, if the customers prefer brunette waitresses over blonde waitresses, then the company is going to hire brunette waitresses...