Under the current development situation, will the price of masks continue to rise?
In the mask market, affected by the epidemic, the demand for masks increased significantly in the short term, and the demand curve moved to the right. Although the supply curve also moved to the right due to the increase in supply, the demand increased more sharply in the short term, so the equilibrium price increased and the equilibrium quantity increased.
If the government restricts the price of 3ply masks, such as setting an upper limit on the price of masks, the supply of masks in the market will be less than the demand for masks, and the phenomenon of shortage will occur. If a price floor is set for masks, there will be oversupply in the market.
In the long run, the price of a product should not exceed its cost of production, otherwise profit opportunities will lure competitors into the long run. As more competitors increase, supply increases, and when supply exceeds demand, the price is driven down, and eventually the price approaches cost.
Total market supply and demand research. It is used to judge the balance state between the total market supply and the total market demand, whether there is total imbalance, and whether the total imbalance belongs to supply exceeds demand or supply exceeds demand.
This time, the demand for masks fluctuated in an unusual situation, which led to a sharp rise in the price of masks. Only when the epidemic had a big impact could the demand for masks surge. Once the epidemic is over, demand for masks is bound to drop dramatically. Because of the epidemic, masks have become the standard, which is expected to increase the demand for masks compared to before the outbreak. First of all, there is a psychological effect on people. They will definitely wear mouth masks in public places. Second, it will become a habit to wear mouth masks in hospitals. Therefore, the nature of masks will change from non-necessities to daily necessities in the future, and the price of masks will fall, but may not recover to the pre-epidemic price level.
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