In perfectly competitive labor markets, the change in the number of people requiring hospital treatment:
Please refer to the first graph.
When the number of people requiring hospital treatment decreases, the labor demand for doctors is decrease. This change will shift the labor demand curve to the left (D'), showing that fewer doctors are needed at an given wages (Q1, P1). The decrease on wages will drive fewer doctors willing to work. However hospital may see this situation as a chance to hire as much as possible doctors since their wages are lower.
Please refer to the second graph for the second scenario.
When the popularity of medical drama TV shows encourage more people to be a doctor, the labor supply curve will shift to the right, indicating the increase of the labor supply at any given wages. This shift will resulting on lower equilibrium wages (Q1, P1) than the initial equilibrium point, but with more labor quantity.
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