The horizontal axis shows the quantity of nurses hired; the vertical axis shows the salary, which is the price in a labor market. The demand curve D of employers who want to hire nurses meets the supply curve S of those qualified and willing to work as nurses at the equilibrium E: a salary of $85,000 and 41,000 nurses.
At an above-equilibrium salary of $90,000, quantity supplied rises to 45,000 but the quantity demanded at the higher pay falls to 40,000: an excess supply, or surplus, of nurses. At a below-equilibrium salary of $75,000, quantity supplied falls to 34,000 while quantity demanded rises to 47,000: excess demand, or a shortage.
Move the two explored salaries to see how the surplus and shortage change. The market works exactly like a market for goods, with the salary adjusting until the two quantities match.
| Annual salary | Quantity demanded | Quantity supplied |
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