Discrimination in the labor market: Understanding its ineffciency

Suppose the marginal productivity (MP) of the worker is equal to 200/x, where x represents the total amount of hours this worker is hired to work. Suppose further that this worker produces a good price equals $5

a) Complete the table below and show a graph illustrating the relationship between value of marginal product (VMP) in the vertical axis and number of hours worked in the horizontal axis

VMP Hours Worked (1, 3, 5, 10, 12, 20)

b) Calculate the optimum number of hours hired by the firm if this worker's wages equals $100 per hour

c) Calculate the optimum number of hours hired by the firm if there is discrimination in favor of this worker, i.e., dicrimination coefficient equals -0.5. And then calculate the optimum number of hours hired by the firm if there is discrimination against this worker, ie., discrimination coefficient equals +0.5

d) Explaain, based on the numbers found in letters, b, and c, why discrimination ( whether in favor or against) in the labor market is inefficient and then discuss why firm competition can eliminate discrimination.