Question

Use the product/industry for toliet paper or hand sanitizer.'

Discuss the impact COVID 19 is having on demand for the product or industry you have chosen. What factors are causing demand to shift?

Explain at least two of these factors. Is demand increasing or decreasing for the product?

Discuss the impact COVID 19 is having on supply for the product or industry you have chosen. What factors are causing supply to shift? Explain at least two of these factors. Is supply increasing or decreasing for the product?

Draw the demand and supply curves for this product before COVID 19. Point out equilibrium. Indicate, using labels and arrows what direction demand and supply has gone since the crisis has begun. Point out the new equilibrium. You do not have to make up numbers, but you need to accurately label demand, supply and equilibrium, both for the original market and the current market after the impact of COVID 19

Answer 1

Product Name= Hand Sanitizer ( The Global Hand Sanitizer Market size was valued at $919 million in 2016 to reach $1,755 million by 2023, and is anticipated to grow at a CAGR of 9.9% from 2017 to 2023.)

The impact of COVID19 on the demand of Hand sanitizer is rising sharply.

Since news of the coronavirus began to spread across the world, the demand for hand sanitizer and disinfecting wipes has surged. Demand for hand sanitizers spiked 1,400% from December to January, according to market researchers at Adobe Analytics.

Factors causing demand to shift= 1) Awarness of consumer. (Due to widespread of corona virus, people are becoming aware of their health conditions.)

2) Increasing number of buyer.

3) Expectations about the future = As the current market scenario there has been 1700% increase in the demand of sanitizer by feburary so people are stocking up more of it resulting into more of demand and shortage of supply.

The demand for the product is increasing widely.

The supply of Hand sanitizer is not nearly as per demand. however, there has been an increase in the supply of hand sanitizer. Players like Jhonsons and Jhonsons , Amazon, DIY formulas have also started producing hand sanitizer.

Factors of supply=

1) Entry of new competitors leads to increase in supply of the product.

2) Lower cost of production due to government intervention and various subsidy.

Thus, supply is also increasing but it is not at par with the demand.

Diagrams=