Final answer:
Businesses increase their risk of litigation when they engage in discriminatory selection practices that underpay or refuse to hire or sell based on race or gender. Market pressures and potential lawsuits can force these businesses to change their practices.
Step-by-step explanation:
Companies run a higher risk of litigation due to their selection practice when they engage in discriminatory behavior. If a business is located in an area with a large minority population and refuses to sell to minorities or underpays women and/or minorities, they are not only cutting into their own profits but also increasing the risk of litigation due to unfair practices.
For example, if discriminatory businesses underpay their workers based on gender or ethnicity, these workers may leave for better opportunities, which can drive the discriminatory business to correct its practices due to market pressure.
Moreover, such practices can lead to lawsuits and damage the business reputation, leading to a loss of profits and market share to competitors who make decisions based more on economic factors than on prejudicial ones.