When wages for doctors increase significantly, this typically indicates a higher demand for medical professionals. As a result, more individuals are motivated to enter the labor market to become doctors due to the attractive wages.
With more people entering the labor market for this profession, the supply of doctors will increase. According to basic supply and demand principles:
- An increase in supply, with demand remaining constant, will typically lead to a decrease in the market equilibrium wage.
- However, if the demand for doctors continues to rise (in response to an increased supply or due to other factors like healthcare needs), it can offset the wage decrease.
Assuming the demand for doctors remains strong, the wages may remain high or stabilize, while the quantity of labor (number of doctors employed) will increase.
Based on this reasoning, the best interpretation is:
The market equilibrium wage will slightly decrease or stabilize, and the equilibrium quantity of labor will increase.
However, since none of your provided options precisely match this response, if we prioritize the increase in employment:
The closest correct answer would be: The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.
This choice accurately reflects that as more doctors enter the field (increase in supply), wages may stabilize or decrease slightly, while the quantity of doctors employed will rise.