Question

Using standard demand and supply curves, describe how market equilibrium price and quantity for N95 masks have changed after the COVID19 outbreak. Be sure that you draw appropriate demand and supply curves before and after the monstrous disease outbreak in the same graph.

Answer 1

. Si E • In the argum, we obsewe that, the initial Demand and Market Equilibrium is a state where market demand and supply balances each other, as a result the price becomes constant (stable). So, in our case, Lets say the initial equilibrium price of was is "P" and equilibrium quantity be But diu to the outbreak of the monstrous disease COVID 19, the demand for Nab masks have increased in the market. This will lead to the night ward shift of the Demand curve. As a result, the equilibrium price go out and equilibrium quantity will also increase. Now, Lets understand the above phenomenon with a diagram. $ $2 Quantity Analysis tupply were D, and si respechvely. The equilibrium point was E, and so the equilibrium price was P, and equilibrium quantity was 8. • But, due to the outbreak of couid19, the demand for N95 masks have Increased As a result, the demand curve has shifted rightwand, Now, our new demand curve is Dr and supply The New equilibrium point us E. and as a result the Qusentity Demanded is qu( Increase in demand ) and New ferice u Pr (Rise up of price). Hence, above us the effect of Increase in demand for Nas mooks in the outbreak of covID 19 in the market. . in same as Si. Curve O