Question

In order to stop the rampant spread of the virus throughout the population, health care workers and others use n95 masks. Graph the market for n95 masks in initial equilibrium and show how the virus will change the market. Be sure to graph the curves with the proper elasticities.

Answer 1

It has been stated that to stop the rampant spread of the virus throughout the population, health care workers and others use n95 masks.

This will result in an increase in demand for n95 masks.

This increase in demand for n95 masks will result in the rightward shift of the demand curve for n95 masks.

Following is the required figure -

Initially, the market for n95 masks was in equilibrium at point, E. The equilibrium price was $P per unit and the equilibrium quantity was Q units.

Now, the demand for n95 masks has increased. This has shifted the demand curve for n95 masks to the right from D to D1.

New equilibrium is attained at point E1, where new demand curve, D1, is intersecting the supply curve, S.

The new equilibrium price is $P1 per unit and the new equilibrium quantity is Q1 units.

Thus, virus has resulted in an increase in both price and quantity in the market for n95 masks.