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Question:

Which statement best states what can be predicted to happen to the wages of nurses and why?

A Wages will rise because the demand for nurses exceeds the supply of nurses.
Explaination

The concept of supply and demand applies to wages as well as products. Wages for nurses tend to keep rising until supply equals demand. An increase in supply would produce a decline in wages only if supply rises above demand. Answer (Wages will rise because demand for nurses is declining) is inaccurate because wages rise when the demand increases, not declines. A growing demand for nurses won’t necessarily lead to wage increases; that happens only if demand exceeds supply. Wages are rising (Wages will rise because the supply of nurses is growing), but that’s not because supply is rising; a rising supply of nurses tends to bring down wages. Hospitals that cannot afford to pay nurses competitive rates won’t have nurses and would have to close or make some kind of alternative arrangement in which nurses weren’t needed.