Suppose the following two events occur in the domestic market for radiologists:
A. Some hospitals are outsourcing some radiology services such as reading x-rays.
B. Some medical schools have closed down their radiology departments as fewer students enroll in this field.
What is likely to happen to the equilibrium wage and quantity of radiologists following these two events?

Question

Quizplus · Accepted Answer

Event A suggests a decrease in domestic demand for radiologists due to outsourcing, while event B indicates a decrease in supply due to fewer graduates. The decrease in demand would tend to lower wages, and the decrease in supply would tend to increase wages, making the overall effect on wages indeterminate. However, both effects would reduce the equilibrium quantity of radiologists employed domestically.

Suppose the Following Two Events Occur in the Domestic Market