Taste-based Discrimination Theory( Becker model)

This question is in the context of the Becker model. Suppose Firm A and Firm B sell their output in the same output market, purchase inputs in the same input markets and use the same production technology. Suppose the owners of Firm A and Firm B hire only women, with the following inequality true: WF(1 + dA) < WM and WF(1 + dB) < WM. If the discrimination coefficient is higher for Firm A than Firm B (dA > dB), then which of the following statements is true?

• Firm B will earn higher profits
• Both firms will earn the same profits
• Firm A will earn higher profits
• Both firms will earn less profit than they would if they had d=0