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Unformatted text preview: -Monopolists set prices. -Competitive firms take prices (determined by D=S in the market) Labor Markets -Workers supply labor (preferences opportunity cost of time relative to the wage offer). -Employers demand labor (at a quantity that maximizes profit depends on wage, technology, and other input prices, etc.) -Assume labor markets competitive: D=S yields an equilibrium wage, employers are wage “Takers.” Look into Becker, Economics of Discrimination and Friendman, Capitalism and Freedom. Markets and Discrimination -A monopolist with a taste for discrimination can maintain a segregated workforce by virtue of price setting power and monopoly profits. -Such discrimination would not persist under competition, because a new entrant could hire qualified workers at a lower wage, pass on savings as lower prices and steal market share from the discriminatory employer. Rationality of Statistical Discrimination...
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This note was uploaded on 11/08/2011 for the course ECON 144 taught by Professor Lisasaunders during the Fall '11 term at UMass (Amherst).
- Fall '11