As more individuals enter the labor market to become doctors due to the increased wages, the supply of doctors in the labor market will rise. Generally, when the supply of labor increases, this can lead to a downward pressure on wages, assuming demand remains constant. However, if the demand for doctors also increases, then wages may stabilize or potentially increase.
Given the scenario provided, where increased wages attract more individuals to the profession, the likely outcome is that:
- The equilibrium quantity of labor (the number of doctors) will increase due to more individuals training and entering the profession.
- The initial increase in supply due to more individuals becoming doctors may lead to a decrease in the equilibrium wage, as long as demand for doctors doesn’t increase at the same rate as supply.
Thus, assuming demand does not shift significantly:
The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.
So the correct answer is: The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.