Reference no: EM133065736

Market StructureProduction Possibility Frontier (PPF) Please refer to the above information for question 1. Since the pandemic started, people are getting used to wearing facemasks in public places. Many facemask manufacturers specialise in different styles, patterns, reusable/disposable and for different types of precautions etc. Some manufactures specialise in particular styles to satisfy the different requirements. To obtain approval for production from the government, there are some basic standards, that facemasks producers must comply with.

Given the following production possibility frontier (PPF)

Question 1

a) What type of market structure is the facemask industry? Explain.

b) What is the production level for face masks and disposable gloves at point C?

c) As we move from point A to point D, what is the opportunity costs of face masks in terms of disposable gloves?

The Supply/Demand Model and Price Elasticity

"As COVID-19 is still not under control, in addition to lockdown, City N has decided to tighten the restrictions by mandating wearing masks in public. In view of this, the local face mask manufacturers are starting to install new production lines".

Referring to the above, use the Supply/demand Model to answer the following questions:

d) How would it affect the demand of facemasks, the demand curve and therefore the equilibrium price and output?

e) How would it affect the supply of facemasks, the supply curve and therefore the equilibrium price and output?

f) What would be the combined effect on the ultimate equilibrium price and output