The diagrams below represent two related labour markets for physics graduates: Market A (Secondary School Teachers) and Market B (Private Sector Researchers).
Following a significant increase in government funding for secondary education, the demand for physics teachers increases from D1 D_1\,D1 to D2D_2D2. Assuming that physics graduates are occupationally mobile between the two sectors, which of the following is the most likely long-run consequence for the private sector research labour market (Market B)?
The supply of private sector researchers will shift to the right, leading to a lower equilibrium wage and a higher employment level.
The supply of private sector researchers will shift to the left, leading to a higher equilibrium wage and a lower employment level.
The demand for private sector researchers will shift to the left, leading to a lower equilibrium wage and a lower employment level.
The demand for private sector researchers will shift to the right, leading to a higher equilibrium wage and a higher employment level.