Assignment Question:

Read the article linked as below and answer the following questions

https://www.malaymail.com/news/malaysia/2020/07/29/shopee-lazada-say-malaysia-has-adequate-supply-of-face-masks-no-need-for-pa/1889143

Question 1

Given the Covid-19 pandemic, face mask has become not only a necessity but also an important personal defense against the virus. In Malaysia, demand for face mask has increased tremendously at the start of the pandemic. Illustrate increase in the demand for face mask with an appropriate diagram.

Explain the diagram in detail and also explain what are the subsequent effects in the face mask market following increase in demand.

Question 2

On 30^thMarch 2020, the Malaysian government for the first time impose a price ceiling of RM1.50 on face mask. Illustrate the price ceiling in the diagram that you have drawn in Question 1. Explain what problem(s) the government has caused by imposing the price ceiling.

Question 3

Make use of the same diagram 2 to explain what steps the Malaysian government has or could havetaken to solve the problem identified in Question 2.

Question 4

The fact that the Malaysian government has intervened in the face mask market indicates that it has no confidence that the market is good enough to allocate the face mask in an efficient manner. Do think the Malaysian government's intervention is necessary or redundant? Justify your answer.