Question

In what ways has the present situation (COVID 19) affected markets? choose an example from: travel and tourism; entertainment; cleaning supplies; medical equipment.

Focus on what is happening to supply, demand and the market price

Answer 1

Ans: The present situation (COVID-19) has changed the entire world economy. The most impacted areas are China, Italy, Iran, Europe, etc. Due to Covid-19, countries are in lockdown situation which means the markets for essential goods are open only. The world will face economic cost of it. Many countries will be impacted economically and experience a slow economic growth.

Example: Medical Equipment

The demand for medical equipment (like sanitizers, toilet paper, medicines, etc.) has increased. So the market demand curve for these goods has shifted to rightward. However, it takes time to produce these goods so the market supply of these goods has remained same and will shift rightward gradually as the production increases. The overall effect is excess market demand for these goods which is causing an increase in the price of medical equipments.