The Bureau of Labor statistics identifies a trend in the labor market for doctors, where wages have increased significantly over the past several years. As a result of this trend, more individuals within the economy enter the labor market to become doctors. How does this influence wages and employment within the labor market?(1 point)

Question

Responses

The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.
The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.

The market equilibrium wage will decrease, and the equilibrium quantity of labor will decrease.
The market equilibrium wage will decrease, and the equilibrium quantity of labor will decrease.

The market equilibrium wage will increase, and the equilibrium quantity of labor will decrease.
The market equilibrium wage will increase, and the equilibrium quantity of labor will decrease.

The market equilibrium wage will increase, and the equilibrium quantity of labor will increase.

Answer 1

The correct response is:

The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.

Here's the reasoning:

As wages for doctors increase, it becomes more attractive for individuals to pursue a career in medicine, leading to an increase in supply of doctors entering the labor market. This increase in supply typically results in a decrease in the market equilibrium wage as more individuals compete for the available positions. However, the equilibrium quantity of labor (the number of doctors employed) will increase as there are more doctors available to fill positions in the market.