Final answer:
The choice not to serve Asian customers because of a belief that they are dominating the electronics gadget industry is an example of racism. In business, discrimination can harm profits and goes against the economic incentives in a competitive market that encourage decisions based on economic factors rather than racial bias.
Step-by-step explanation:
The reason behind your friend's decision not to serve Asian customers because he feels they are taking over the electronic gadget world is racism. Racism involves prejudice and discrimination against individuals based on their racial group. In a business context, discriminating against customers due to their ethnicity can significantly harm a business's profitability and is contrary to the principles of a competitive market that rewards decisions made based on economic factors, not racial bias.
As economist William A. Darity Jr. points out, even competitive market forces sometimes are not sufficient to overcome discriminatory practices in employment or wages. However, in many cases, businesses that prioritize economic efficiency over personal bias tend to thrive because they capitalize on the widest range of talent and serve the broadest customer base.
For example, a flower delivery business in an area with many black customers would have an incentive to serve all clients to maximize profits, irrespective of the owner's personal biases. Similarly, an assembly line facing a labor shortage would benefit from hiring qualified workers regardless of gender, and a home health care business could not afford to pay discriminatory wages if it resulted in losing qualified Hispanic employees to competitors offering better wages.