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Social Science Clinic => Economics => Microeconomics => Topic started by: clmills979 on Jun 18, 2019

Title: The National Association of Business Schools recently required that all business schools must hire ...
Post by: clmills979 on Jun 18, 2019

The National Association of Business Schools recently required that all business schools must hire three additional people with Ph.D. degrees in English literature. What is the immediate effect on the salaries of people with Ph.D.s in English literature? What will be the effect after ten years?

Title: The National Association of Business Schools recently required that all business schools must hire ...
Post by: srodz on Jun 18, 2019

See the above figure. Initially, the quantity of Ph.D.s is relatively fixed. The increased demand raises their salary. In the long run, the increased salary attracts more people to train for a Ph.D. in English literature. The long-run elasticity of supply is greater than the short-run elasticity of supply. After 10 years, the salary increase is not as great as the initial salary increase.