Assume that the medical equipment firm involves extremely high set up costs and has to spend a huge amount on research and development. More importantly, the company has to fulfil the government's stringent requirements. Given the unique products, almost everybody uses this local company in the country.

The outbreak of coronavirus has put a huge unexpected demand on the locally made medical equipment. Unfortunately, at the same time, the country has also just committed to supply these equipment overseas due to the earlier outbreak of the coronavirus occurring from abroad. Q1. A) What are the factors affecting the demand of medical equipment? How is this going to affect the demand curve?

What are the factors affecting the supply of medical equipment? How is this going to affect the supply curve?

Use the Supply / Demand Model to show how the change in supply and demand affect the ultimate change in equilibrium price (Pe) and quantity (Qe) of the locally made medical equipment in the country.

What type of market structure is the medical equipment firm in the country according to the above information? Justify your opinion.