Suppose that as the demand for nurses increases, the supply shrinks due to an increasing number of nurses

entering retirement and increases in the tuition of nursing degrees. The leftward shift of the supply curve in Figure

4.11 captures the impact of a decreasing supply of nurses. The shifts in the two curves result in higher salaries for

nurses, but the overall impact on the quantity of nurses is uncertain, as it depends on the relative shifts of supply

and demand.

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4.3 • The Market System as an Efficient Mechanism for Information 105

FIGURE 4.11 Impact of Decreasing Supply of Nurses between 2020 and 2030 The increase in demand for nurses
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