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Suppose a firm needs 10 employees. The firm hires 5 employees of type X who receive a wage of $9.00/hour and 5 employees of type
Suppose a firm needs 10 employees. The firm hires 5 employees of type X who receive a wage of $9.00/hour and 5 employees of type Y who receive a wage of $8.00/hour. If the labor market is competitive and the wage differential persists in the long run, is this likely the result of employer-based discrimination? Why or why not? Is there another type of preference-based discrimination that could explain this outcome? Display keyboard shortcuts for Rich Content Editor
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