Consider a Color-Blind Firm That Is Currently Maximizing Profits

Consider a color-blind firm that is currently maximizing profits. An affirmative action policy is put in place requiring that all firms in the industry abide by a certain quota. Which of the following will occur?

A) There will be no effect because the firm is currently color-blind.
B) If the quota is already met, the firm will make no changes in its hiring practices.
C) If the firm currently meets the required quota, it will cut costs by adjusting labor to exactly meet the affirmative action requirements.
D) If the firm currently meets the quota, it will begin to lose profits due to the affirmative action requirements.
E) The firm will have to fire some workers.

Correct Answer:

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