Demographers predict that the average age of the population of the U.S.will increase.One result will be an increase in the demand for nurses.Assume that the graph below describes the current nursing labor market in a mid-sized city,and that the market is a competitive one.
Suppose that several years ago the supply of nurses in this city was as shown as Supply A.Suppose further that the nursing market had been in equilibrium at that time and that wages did not change when supply changed to Supply,current.(Assume that demand has remained stable at Demand,current. )The result is that nurses earn _____ and

Question

Demographers predict that the average age of the population of the U.S.will increase.One result will be an increase in the demand for nurses.Assume that the graph below describes the current nursing labor market in a mid-sized city,and that the market is a competitive one. 
Suppose that several years ago the supply of nurses in this city was as shown as Supply A.Suppose further that the nursing market had been in equilibrium at that time and that wages did not change when supply changed to Supply,current.(Assume that demand has remained stable at Demand,current. )The result is that nurses earn _____ and

Quizplus · Accepted Answer

When the supply of nurses decreased from Supply A to Supply current, the equilibrium price (wage) remained the same at $40 per hour, but the quantity of nurses demanded exceeded the quantity supplied. This is known as a nursing shortage, as there are not enough nurses to fulfill the demand at the current wage rate. Therefore, nurses earn $40 and there is a nursing shortage. Choice A is false because the graph shows that at the current wage rate of $40, the quantity of nurses demanded is greater than 100, so more than 100 nurses work per hour. Choice C is false because if there were many nurses willing to work for $40 who are unable to find a job, the quantity of nurses supplied would exceed the quantity demanded, resulting in a surplus of nurses and a decrease in the equilibrium wage rate. Choice D is false because other labor markets are not relevant to the nursing labor market in this scenario.

Demographers Predict That the Average Age of the Population of the U.S.will