Assume That the Graph Below Describes the Current Labor Market

Assume that the graph below describes the current labor market for nurses in a mid-sized city and that the labor market is perfectly competitive. If supply shifts from S₀ to S₁ and demand shifts from D₀ to D₁, then

A) wages will have to rise to $60 to avoid a nursing shortage.
B) wages will have to rise to $50 to avoid a nursing shortage.
C) a wage of $40 will be sufficient to achieve equilibrium.
D) a wage of $50 will lead to an excess supply of nurses.

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