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Answer in Microeconomics for Jeff #111777

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April 21st, 2023

When the government increases the number of schools it operates, it leads to an increase in demand for teachers. However, the government goes ahead and raises the qualifications that one needs to become a teacher. An increase in required skills for teaching reduces the supply of labor (QS) because few people will be willing to take up the teaching course. Yet, at the same time, the demand (QD) for teachers is high. As a result, the equilibrium wage rate decreases.

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