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Taste-based Discrimination Theory According to the Becker model of preference based discrimination on the part of employers, it is true that firms maximize utility and

Taste-based Discrimination Theory

According to the Becker model of preference based discrimination on the part of employers, it is true that firms maximize utility and not profits. What does this mean?

  • It means that firms are willing to take less profits in order to be discriminatory, since being discriminatory gives them utility
  • All answers are correct
  • It means that firms are unaware that they can make more profits if they stopped discriminating
  • It means that employees only want to work at firms that don't discriminate, hence employees are maximizing their utility and by consequence, the firm's utility

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