4. Effect of discrimination on the market price Consider the market for carriage rides, which you can assume is a competitive market. Suppose some carriage companies are discriminatory and hire only American citizens to drive their carriages, while other firms are nondiscriminatorythey don't care about the citizenship of the drivers they hire as long as they have a legal right to work in the United States. Assume for now that customers are nondiscriminatorywhen they decide to take a carriage, they don't care about the citizenship status of the driver. The marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves of the two types of firms are shown on the following graphs. Figure A shows the cost structure of a discriminatory firm; Figure B shows the cost structure of a nondiscriminatory firm. Because nondiscriminatory firms are able to hire from a larger pool of potential workers, they are able to provide the same services at a lower cost. r\". W \\?/ \\?/ Figure A: Discriminatory Firm Figure B: Nondiscriminatory Firm 100 100 - 90 90 - 60 60 E 70 E 70 E E 5 60 E 60 - D. Q. U! E 50 50 8 8 V 40 v 40 ATC