- 5 Suppose The Firm S Production Function Is Given By Q 10 E E Where Ew And Ey Are The Number Of Whites And Blacks Em 1 (103.71 KiB) Viewed 34 times
5. Suppose the firm's production function is given by q=10, E, +E where Ew and Ey are the number of whites and blacks em
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5. Suppose the firm's production function is given by q=10, E, +E where Ew and Ey are the number of whites and blacks em
5. Suppose the firm's production function is given by q=10, E, +E where Ew and Ey are the number of whites and blacks employed by the firm respectively. Suppose the market wage for black workers is $10, the market wage for whites is $20, and the price of each unit of output is $100. (a) How many workers would a firm hire if it does not discriminate? How much profit does this non-discriminatory firm earn if there are no other costs? (b) Consider a firm that discriminates against blacks with a discrimination coefficient of 0.25. How many workers does this firm hire? How much profit does it earn? (c) Finally, consider a firm that has a discrimination coefficient equal to 1.25. How many workers does this firm hire? How much profit does it earn?