Which of the following statements regarding discrimination is true? a. Discrimination can only persist in a competitive labor market if customers are willing to pay to maintain the discriminatory practice or the government requires discrimination. b. Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market. c. The existence of a wage differential among groups is strong evidence of discrimination in the labor market. d. Discrimination cannot exist in a competitive labor market.

1. In a competitive labor market, if an employer has a taste for discrimination (i.e., a bias against certain groups), then hiring a disadvantaged worker at a lower wage would normally be cost‐saving. However, if discrimination is purely based on employer preferences, the market tends to eliminate such differences because profit-maximizing firms would not pay a premium for discrimination unless there is an external reason. 2. For discrimination to persist in equilibrium, one of the following must occur: - Customers (or clients) are willing to pay extra for discriminatory services. This means that consumers have preferences that support the discriminatory practice. - The government mandates or enforces a discriminatory policy. This implies that legal or institutional rules preserve discrimination even in competitive conditions. 3. Option (a) states: \( \text{"Discrimination can only persist in a competitive labor market if customers are willing to pay to maintain the discriminatory practice or the government requires discrimination."} \) This statement correctly describes the conditions under which discrimination can persist in a competitive market. 4. Examining the other options: - Option (b) incorrectly emphasizes bigoted employers as the primary cause of wage differentials in competition. In a competitive market, such biases tend to be eliminated absent external support. - Option (c) incorrectly infers that a wage differential is incontrovertible evidence of discrimination, whereas differences in productivity or human capital can also create different wages. - Option (d) wrongly claims that discrimination cannot exist at all in a competitive labor market, ignoring the possibilities mentioned above. 5. Therefore, the correct answer is: \( \text{(a)} \)