Hi Tutor,

I need help in this case analysis re: Microeconomic Analysis: Supply and Demand. My chosen commodity is Face Masks in the US.

Can you help me with the conclusion?

Provide your own final thoughts, opinion, and understanding of the outcome. Do you believe this commodity is profitable for its producers? Or should they provide something different instead? Or should they modify the commodity? Moreover, if you were to produce this commodity, what would you do to increase your revenue?

----------- Here's my work so far. for your reference --------------

Introduction

This week's case study is the microeconomic analysis about the supply and demand of face masks in the United States. During the pandemic, face masks are one if not the most important commodities not only in USA but in the world.Face masks are personal protective equipment used to prevent the spread of respiratory infections, including COVID-19. The market for face masks is global, but for this analysis, we will only focus on the United States, which is a significant consumer of face masks during the pandemic. The popularity of face masks in the USA skyrocketed in early 2020 when the COVID-19 pandemic hit the country. Public health officials recommended wearing face masks as a way to slow the spread of the virus, and many state and local governments mandated their use in public places. The demand for face masks has remained high since then due to ongoing waves of the pandemic and the emergence of new COVID-19 variants.

The main factors affecting the supply of face masks are the availability of raw materials, production capacity, and distribution channels. The supply of face masks was initially limited because of the sudden surge in demand, causing shortages and price spikes. However, overtime, manufacturers ramped up production and distribution channels improved, leading to increased supply and lower prices.

The main factors affecting the demand for face masks include the severity and duration of the pandemic, government mandates and recommendations, and public perception of the effectiveness of face masks. As the pandemic worsened, demand for face masks increased, and government mandates and recommendations reinforced this demand. The public's perception of the effectiveness of face masks has also influenced demand, with some individuals choosing to wear masks as a personal choice even when not required.

In summary, the supply and demand for face masks have been heavily influenced by the COVID-19 pandemic, government mandates and recommendations, and public perception. The initial surge in demand and limited supply led to price hikes, but increased production and distribution have led to more affordable prices. The ongoing pandemic and evolving public health guidance will likely continue to affect the supply and demand for face masks in the future.

Analysis

Based on the data provided, the demand in face masks significantly increased because of the pandemic. Back in 2020, the demand increased and the supply decrease causing a significant increase in the price of face masks. In image 1, there was significant increase in market size in 2020 and 2021amounting to 5.47 billion and 7.37 billion respectively. According to a report by Fortune Business Insights (2022),the demand for face masks in the US market was valued at USD 2.47 billion in 2019 and 7.37 billion in 2021 and is expected to grow by 9.97 billion by 2031.In image 2, it is also stated that 80% of Americans wear face masks in public for their safety and protection.The report clearly states that the COVID-19 pandemic is the reason why face masks have significantly increased the demand in the US market.

The supply of face masks in the US market has been impacted by the COVID-19 pandemic. In the early months of the pandemic, there was a shortage of face masks in the US market causing the supply to go down that eventually affected the price of face masks not only in the US but globally. In image 3, the table indicates an increase in volume at 378 billion in 2020 and slowly decreased at 147.50 billion in 2022, and 44.89 billion in 2023 because the threat of the pandemic have gone down.

The market price for face masks in the US has fluctuated significantly during the pandemic. According to (Statista, 2023), price per unit increased from $.11 in 2019 to $.59 in 2020. By 2021 to 2023, prices started to go down at $.32 and $.25 respectively.As covid cases slowly decrease, the demand too decreases but with as ample supply of face masks makes it more affordable.

Conclusion?