The city government of Washington, DC, has passed a regulation that requires most childcare workers to hold
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The city government of Washington, DC, has passed a regulation that requires most childcare workers to hold at least an associate’s degree. Suppose that this regulation increases the quality of childcare and causes the demand for childcare services to increase. At the same time, assume that complying with the new government regulation increases the costs of firms providing childcare services. Draw a demand and supply graph to illustrate the effects of these changes in the market for childcare services. Briefly explain whether you can determine if the total quantity of childcare services purchased will increase or decrease as a result of the regulations.
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