Question

1. Explain how discrimination affects firm profits in each of the following cases. (3 pts)

a. A firm that is discriminating against women because the owner is sexist.

b. A firm that is discriminating against women because the customers are sexist.

c. A firm that is discriminating against women because on average they are less productive than men in this industry.

Answer 1

1)a. ) When the firm is discriminating women workers as the owner is sexiest then it is obvious that the wages of women workers will be less than the male workers thus the firm has to pay less amount of money to produce same amount of output it will increase firms profit

B) in the case if the coworkers are sexiest working with women will harm their moral ideas, if the owner are liberal enough to give same wage and show same honour to the women workers as male those sexist male worker may not willing to work with female co workers any more thus the firms profit will slow down

But if both the owner and the co workers are sexiest then firm will lower the wage of those women workers ore and eventually firm will earn profit

c) in labour intensive industries where physical strength is more needed than skill the demand for women labour will be less they will discriminate women workers as low productive in those industries thus they will hire only male workers to increase profit

For those industries where human capital is needed along with knowledge, skill , experience of the workers then women workers can be same as male workers in those industries if the firm discriminate women workers as low productive that is actually harmful for the firm's profit cause skilled women workers can be more productive than male workers.