Assume that the graph below describes the current labor market for nurses in a mid-sized city and that the labor market is perfectly competitive. Suppose that several years ago the supply of nurses in this city was S₀. What might explain the change from S₀ to S₁?

Question

Assume that the graph below describes the current labor market for nurses in a mid-sized city and that the labor market is perfectly competitive.  Suppose that several years ago the supply of nurses in this city was S₀. What might explain the change from S₀ to S₁?

Quizplus · Accepted Answer

A movement from S₀ to S₁ represents a decrease in supply, which could have occurred because of better employment opportunities developed outside of nursing.

Assume That the Graph Below Describes the Current Labor Market