Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. In the market for high school chemistry teachers, the equilibrium wage

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With fewer chemicals available, the marginal productivity of high school chemistry teachers decreases as they have fewer resources to work with. This will lead to a decrease in the demand for chemistry teachers and a decrease in the equilibrium wage. Note that the supply of chemistry teachers is not affected by this environmental regulation, since it is a factor outside of the labor market for such workers.

Suppose That the Labor Market for High School Chemistry Teachers