3. Two firms operate in the same competitive labour market. They both have the same demand "D" forworkers. One company FIRM “A" discriminates against certain group of workers and the other, FIRM"B" does not discriminate against any group of workers.WageS2Quantitya) Based on the diagram what is the supply of workersseen by FIRM “A", S1 or S2? Explainyour answer.b)Based on the diagram, which firms pays the higher wage rate to workers? Explainb) A new president is hired by FIRM “A". First day she issues a new policy, “no morediscrimination". Describe and explain the impact this policy will have on profitability of FIRM"A" and FIRM “B".

Answer - Given in the question- Part a Answer- S1 is the supply of the workers as seen by the FIRM…

3. Two firms operate in the same competitive labour market. They both have the same demand “D" for workers. One company FIRM “A" discriminates against certain group of workers and the other, FIRM "B" does not discriminate against any group of workers. Wage S2 W1 W2 Quantity a) Based on the diagram what is the supply of workers as seen by FIRM “A", S1 or S2? Explain your answer. b) Based on the diagram, which firms pays the higher wage rate to workers? Explain b) A new president is hired by FIRM “A". First day she issues a new policy, “no more discrimination". Describe and explain the impact this policy will have on profitability of FIRM “A" and FIRM “B".