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Unformatted text preview: be easy to x in the market? Then, give two reasons why there is a nursing shortage. Shortages should disappear if the market is allowed to adjust. If the wages oered are higher, more nurses should decide to work (or people will decide to become nurses) and the shortage will go away. Possible reasons for nursing shortage: Not enough nursing schools/faculty Hospitals have monopsony power over the nurse market. Because they aect the wage, it is very costly to hire an additional nurse. As a result, they employ a small number of nurses at a modest wage. However, at that wage, it appears that they should want more nurses, but no additional nurses will enter the market at that modest wage. Thus, it appears that there is a shortage....
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- Spring '11