Unformatted text preview: be easy to ﬁx 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 oﬀered 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 aﬀect 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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This note was uploaded on 01/18/2012 for the course HPAM 8600 taught by Professor Ferig during the Spring '11 term at UGA.
- Spring '11