Question

Scenario:

Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be.
Refer to Scenario above. If the firms in this market are profit maximizers and customers do not care if a woman or a man works on their car, what will likely happen?

Answer 1

If the firms want to maximize profit and they are price takers, they will eventually start hiring more women. Since the demand for female workers is lower, the price of their labor should also be lower. That means that if a firm wants to maximize its profits, it will need to decrease its costs. A way to decrease a company's costs is to hire cheaper labor.