Our group has selected N95 mask as our product
Firstly demand refers to the quantity of good/services consumers are willing and able to buy at different prices over specific time periods. Which then lead to the law for demand states that there is a inverse relationship between prices and quantity demanded of a good/services, during a specific period of time, ceteris paribus. If the price for demand increases, the quantity demanded would decrease, vice-versa. Therefore demand can be affected by prices and non-prices determinants.
Non-price determinants for demand are able cause shifts in demand curve to both right or left. With such shifts, it will affect the the market equilibrium. As a result attaining a new market equilibrium. With the price of the good being a non-price determinate,it will affect the equilibrium price and quantity of N95 masks. In 2013, the 2013 Southeast Asian haze was notable for causing record high levels of pollution in Singapore and several parts of Malaysia. Singapore was expecting a bad haze to come in which was an aftermath of deforestation in Indonesia. People were very conscious of the health with the upcoming haze.They were expected buy the N95 mask as soon as possible. Companies were to increase the price if N95 masks in the future as they see this as an opportunity in gaining more profits. People were likely to but the mask first as they are relatively cheaper before the haze. Therefore the demand in N95 masks increased price of the good in which would lead to a shift of the curve to the right as shown in the diagram.
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As show in the diagram, the shift of the demand curve to the right would cause a shortage in quantity demanded from the initial equilibrium. An increase in price would be needed to increase the quantity supplied to reduce the shortage initially.With the shift in demand, the first equilibrium would increase to form a new price/supply equilibrium at the intersection points and also upward movements on the demand curve to increase prices and quantity.
Secondly would be the Supply refers to the quantity of a good or services which sellers are willing and able to offer for sale at different price levels, over a specific period of time, ceteris paribus. This would then lead us to the law of supply where instead of an inverse relationship withe the price and quantity supplied, instead there is a direct relationship between these two. This would be over a specific period of time, ceteris paribus. In which if the prices of supply were to increase, the quantity supplied would also increase, vice-versa. Similarly the supply curve can be affected by both the price or the non-price determinate.
Non-price determinants for supply are also able cause shifts in supply curve alike to the demand curve, both left and to the right. With the shift in the supply curve, it will affect the the market equilibrium. As a result a new market equilibrium would be reached. Technology is a non-price determinate that affects the supply curve. For example in other countries where they were also going through the haze, they had limited resources to provide it's people with the N95 masks. Whereas in Singapore with the technological advancement, Singapore could produce more N95 with the machinery. With the the high demand where Minister of Defence Ng Eng Hen noted that panic-buying of masks has created an “artificial shortage” that has caused "supply-chain bottlenecks" at that time in 2013. With the running out of stock for N95, more masks were made.This increase the supply thus lead to a shift of the curve outwards.
Proven in the diagram, the shift of the supply curve to the right would cause a surplus in quantity demanded from the initial equilibrium. An decrease in price would be needed to reduce the quantity supplied to lighten the burden of the surplus.With the shift in supply, the first equilibrium would decrease to form a new price/supply equilibrium at the intersection points and also downward movements on the demand curve to decrease prices and quantity.
A video more on how the demand and supply of a product changes and its resulting effect on the new equilibrium price and quantity = Click Here
Non-price determinants for supply are also able cause shifts in supply curve alike to the demand curve, both left and to the right. With the shift in the supply curve, it will affect the the market equilibrium. As a result a new market equilibrium would be reached. Technology is a non-price determinate that affects the supply curve. For example in other countries where they were also going through the haze, they had limited resources to provide it's people with the N95 masks. Whereas in Singapore with the technological advancement, Singapore could produce more N95 with the machinery. With the the high demand where Minister of Defence Ng Eng Hen noted that panic-buying of masks has created an “artificial shortage” that has caused "supply-chain bottlenecks" at that time in 2013. With the running out of stock for N95, more masks were made.This increase the supply thus lead to a shift of the curve outwards.
Proven in the diagram, the shift of the supply curve to the right would cause a surplus in quantity demanded from the initial equilibrium. An decrease in price would be needed to reduce the quantity supplied to lighten the burden of the surplus.With the shift in supply, the first equilibrium would decrease to form a new price/supply equilibrium at the intersection points and also downward movements on the demand curve to decrease prices and quantity.
A video more on how the demand and supply of a product changes and its resulting effect on the new equilibrium price and quantity = Click Here
DONE BY: ALFIAN, DERRON, LENNY, SHANE
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