Simultaneous Shifts in Labor Supply and Demand

Steps:

• More university graduates increase the supply of IT labor, shifting the supply curve rightward.
• Greater AI use boosts demand for IT staff, shifting the demand curve rightward.
• The rightward supply shift alone would lower the equilibrium wage and raise quantity.
• Combined with rightward demand shift, equilibrium quantity rises, but wage change depends on shift magnitudes; new equilibrium is at higher quantity point.

Why C is correct:

• C depicts the intersection of the new right-shifted supply and demand curves, per the law of supply and demand where both increases raise equilibrium quantity.

Why the others are wrong:

• A: Shows only supply shift, ignoring demand increase.
• B: Shows only demand shift, ignoring supply increase.
• D: Incorrectly suggests leftward shifts, reducing quantity.

Final answer: C