https://www.nst.com.my/news/nation/2020/03/576681/covid-19-govt-sets-new-face-mask-ceiling-price-bans–
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With the Novel Coronavirus or COVID-19 rampaging across countries worldwide, both health and economic
sectors have and will continue to face major hardships. Among one of them would be the supply of protective
goods such as sanitary liquids as well as face masks. Due to this extreme rise in demand, price has surged
exponentially, causing a huge portion of the population unable to purchase these essential products.
Looking it at as simply as possible, COVID-19 spreads through fluids, which is why a face mask is important.
The demand for face masks has risen up to the point that firms are no longer able to cope with. The demand
and supply diagram of pre and post pandemic can be illustrated as of bellow. Due to this rise in demand, the
demand curve has shifted from D to D1. Not only that, its price elasticity of demand has dramatically dropped as
seen from the slope, being very inelastic. Price elasticity of demand is the change in quantity demanded of a
product for a change in price. This is due to face masks being a sort of necessity now and if looked from the
entire face mask market, there isn’t any other substitute. The price elasticity of supply also has changed due to
the absence of raw materials and factories working at maximum capacity. Hence, due to being at maximum
capacity, firms have no choice but to raise prices. Not only that, the price for the raw materials of face masks
has along increased. Costs of production will also increase and firms must raise prices to maintain profit margin.
Price elasticity of supply is the change in supply of a product for a change in price. With the graph taken into
account, not only has the price of masks increased, it is also doomed to be barely affected by a change in price.
Simply said, a seller can set ridiculously high prices for these masks and buyers have no choice but to accept it
as PED of masks have become very inelastic. This can cause disruption to the market and extreme adverse
