In: Economics
Our lives have been totally disrupted by COVID 19. People have been laid off, companies have been told to close and many people are working from home. In this paper I want you to discuss the impact of this crisis on supply and demand on a particular industry or product. Remember, that in microeconomics we don’t talk about an entire economy. The impact on GDP, unemployment and interest rates are macroeconomic topics, not microeconomic topics.
Choose a particular product or industry. When answering these questions, you need to conduct research to back up your opinion. Cite at least 3 articles that discuss the product or industry you have chosen.
The travel & tourism industry is severely affected by the coronavirus outbreak.
DEMAND
People are avoiding travel to different countries and cities. It is negatively impacted the travel business and has affected the tourism benefits of the affected countries. The coronavirus epidemic is putting up to 50 million jobs in the global travel and tourism sector at risk, with travel likely to slump by a quarter this year, Asia is the most affected continent, the World Travel and Tourism Council has said.
Reason for the shift of the demand curve
Thus demand is decreasing in travel and tourism industry
SUPPLY
While the country’s focus currently is rightly on fighting the health crisis and mitigating its immediate impacts, planning on how to re-open the economy is very important. The government should work to further improve the business climate for the private sector and continue undertaking serious reforms to overcome institutional weaknesses.
Reason for the shift of the supply curve
So, supply is decreasing.
Rapid-onset demand- or supply-side economic shocks such as those caused by the COVID-19 pandemic will affect the economy badly.
Initial equilibrium was Eo and new equilibrium is E1.