Question

In the following, the demand and supply changes discussed earlier are combined!  Predict the change in the equilibrium price and quantity.

Draw a picture. Find the new equilibrium price and quantity.  Write a sentence to summarize your findings.

1. Consider the market for home health care workers.  Assume that community colleges double the number of home health care workers that graduate this year, AND the oldest baby boomers have turned 70.

Answer 1

As the community colleges double the number of home health care workers that graduate this year, the supply of healthcare workers is going to increase and the supply curve will shift to the right.

As the oldest baby boomers have turned 70, they will need healthcare services and the demand for healthcare workers will also increase. The demand curve shifts to the right.

Thus, at the new point of equilibrium, the number of healthcare workers will increase. The effect on the price of healthcare workers is uncertain. If the demand increase by more than supply, the prcie will increase and if the supply increases by more than demand, the price will decrease.