Question

What will happen if the market price moves downward? (3 marks)

Current Covid-19 pandemic showed the cost of illness (number of people infected and symptomatic). What are the hidden costs of the Covid-19 pandemic and how can these costs be avoided or reduced? (10 marks)

Answer 1

Answer)

1. When market price goes downward people start demanding more,however supply does not increase in fact it decreases so a shortage is created in market where demand is higher than supply and this shortage leads to increase in market price till it reaches equilibrium once again.
2. Hidden costs of current pandemic are the economic costs associated with it .For starters a lot of production activities got hampered add to that supply chain disruption ehich means even when everything becomes normal it will take a lot of efforts to get things back on track moreover lot of jobs have been lost lot of businesses have been closed which could lead to increase in crime,finally government spending to fight this pandemic means no funds for development.These costs can be reduced by increasing productivity more entrepreneurship and support from administration in addition red tape in bureaucracy needs to be reduced.

Answer is complete. Thank you!