price of gasoline, like the average salary for nurses, can still be useful because it reflects what is happening in

most of the submarkets.

When the price of labor is not at the equilibrium, economic incentives tend to move salaries toward the

equilibrium. For example, if salaries for nurses in Minneapolis-St. Paul-Bloomington were above the

equilibrium at $90,000 per year, then 43,000 people want to work as nurses, but employers want to hire only

39,000 nurses. At that above-equilibrium salary, excess supply or a surplus results. In a situation of excess

supply in the labor market, with many applicants for every job opening, employers will have an incentive to

offer lower wages than they otherwise would have. Nurses’ salary will move down toward equilibrium.

In contrast, if the salary is below the equilibrium at, say, $60,000 per year, then a situation of excess demand or
{"source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "creationdate": "2022-12-07T14:15:44-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "upload_timestamp": "2026-02-07T15:24:38.309401", "moddate": "2022-12-07T14:23:05-06:00", "file_type": ".pdf", "title": "Principles of Microeconomics 3e", "file_name": "Microeconomics3e.pdf", "file_size_mb": 26.99, "creator": "PDFMiner", "batch_upload": true, "uploaded_via": "batch_uploader", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "total_pages": 597, "producer": "Prince 14.2 (www.princexml.com)"}