Answer to Question #306838 in Microeconomics for Yabu

Question

Since the last few years, significant number of physicians have been graduated. If the government decides to reduce this number starting from this year, what would happen to the supply curve for physician services? Explain

Answer 1

There will be shortage of physicians in the country. This implies that prices of physician services will increase. Therefore, the supply curve will shift to the left to show that physician services will be offered at high prices. A shift to the left indicate increase in price while the supply reduces.