ECON1020 Toilet Paper During Covid-19 Pandemic Assignment Sample

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• Subject Code : ECON1020
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• Subject Name : Economics

Principles of Economics

Introduction to Toilet Paper During Covid-19 Pandemic

During the COVID 19 times, the toilet paper which was the regular commodity that was freely available in the market, with the low substitutes, suddenly experienced the surge in the demand. It has caused the people to overstock the toilet paper, due to the panic gripe state. Consecutively, with the low supply in the market and with the high demand for the toilet paper, it has caused the market price to rise and creating a shortage for the toilet paper (Soldati, et al 2016). Toilet paper crises were seen as the phenomenon, during the lockdown and the shutdown situations, where the people were overstocking themselves with the supplies and even finding its ways to protect themselves from the infection and the other contagious (Sarfaraz, et al 2020).

Perfect Market

Toilet paper product is a normal good, which is available at the normal price. It is not a necessary product, has substitutes and even has many competitors (Rajasekaran, et al 2020). With the toilet paper market, the common issue was the perfect substitutes, freely available market of the toilet paper and the high competition, causing the low pricing and market equilibrium. The market for the toilet paper was elastic, where the people were sensitive to the price changing factors and the various factors. With the Coved 19, suddenly the toilet paper became the necessary good from the normal good. It became an essential commodity and must-have in every household. Due to the panic gripe and with the consequent rise in the Pandemic numbers, toilet paper became the necessary product and the elasticity became inelastic. People were less sensitive to the changing in the prices of the toilet paper. Even if the price rises or falls, people would still buy and they were overstocking causing the price of the Toilet paper to rise further.

This was the normal market of the Toilet market, before the Pandemic attack (Bai, 2020)

Graph A, Normal market o Toilet paper Source (Sarfaraz, et al 2020).

In the graph, A, which shows the market equilibrium m to the Toilet paper, which was in equal, how much the consumer demanded was equated with the quantity supplied. There was an equal price and there was an equal demand for it.

 Graph B, Toilet paper during Pandemic times, Source (Sarfaraz, et al 2020).

In the graph B, as there was a sudden demand of the toilet paper, it created the market to imbalance and it has caused a pressure on the price to rise and subsequently, the rising demand was met with the extra supply of the quantity (Laato, 2020). It has caused the price to rise from the E point of the E1 and the demand DD1 to rise to the D2D2. It has also caused the price to rise from the P1 to the P2 levels with the equating quantity from the Q1 to the Q2 levels.

Market Structure

The market structure of the Toilet paper is a Perfect competition. Where there is a large number of buyers, sellers and there is an equilibrium price to the quantity. In the graph C, as one can see that there is an equating price to the equating quantity and there is also the selling price at the D=AR =MR point. The same price which the firm charges, is also the same price which the industry also sells out (Naeem, 2020).

Graph C Source (Sarfaraz, et al 2020).

In here the characteristics of the Perfect competition are the-:

• In here all the firms sell an identical product (product is also a commodity" or "homogeneous").
• Firms are the price takers (which cannot influence the market price with respect to the price of the product (Paul, 2020).
• Market share also has a limited influence on prices.
• Buyers would be able to compete or to have the “perfect" information—that can identify the past, present and the future. The product can be sold at an even price and it can be charged by every firm.
• Resources would be the same that can follow by the labour that can equally be perfectly mobile.
• Firms would enter or exit the market and incur without cost.

Though the Toilet paper has a perfect market structure, during the Covid 19, with the sudden rise of the toilet paper, many market players tried to supply as much and were able to reap the maximize profits (Rajasekaran, et al 2020).

Conduct

Perfect competition has largely the below type of the market-:

A Large and Homogeneous Market 

There is a large number of the buyers and the sellers and the market is perfectly competitive. The same can also be experienced by the large number of sellers, who can equate and balance the market. The sellers are also small firms that can work and also have large corporations. Each firm is incapable to control the price and there are also minimum ways to control the prices and there is also a limited supply adjustment. It is also a way that the market can sell the products, with minimal differences and there are also limited capabilities, features, and pricing. The perfect competition, also sees that there are a large number of the buyers that cannot distinguish the market and there are also the physical attributes, that can follow the size or colour along with having the intangible values, for example, the branding.

Absence of Controls

Governments also play a bit role, in shaping up the market formation and there are the products that can be impacted with the regulation. It can also be due to the price controls and having low control over the entry and exit of firms. The same can also be expired by the market that can be set with the function, having a key market that can follow the function. Such as the pharmaceutical industry, that can sell and even have the limited roster of rules that can impact the research, production along with the sale of drugs (Sarfaraz, et al 2020).

Perfect Information Availability

There can also be limited information, that is available in the econ systems and it would lead to high competition. With the high competing, there can be a problem of the industry that can cause a significant advantage. Such as, there can be limited, knowledge and there can also be a limited sourcing and supplier pricing. It can cause an issue in the issue or break market that can cause the imbalance in the market. It would also be due to the knowledge- and research-intensive industries. For example, the pharmaceuticals and technology, information, that would have a limited about the patents and research initiatives at competitors and for the companies, that can develop competitive strategies and would build around the products (Sarfaraz, et al 2020).

Toilet paper is the perfect market product. But with the large supplies and the large consumers demanding, it has caused the many new entrants to come into his market and earn the normal market share. It has also caused the market to have a large number of suppliers and impacted with the regulated pricing. With the large quantity supplied, the prices became normal. With the six months, the market has now stabilized and now has equated.

Performance

Perfect competition is the market for the toilet paper, that is an ideal type of market structure that would have the all the producers and consumers and it would follow the full and the symmetric information It would have a no transaction costs, and there would be a large number of the number of producers and consumers that would equally be competing with each other.

 Graph D, Perfect Competition structure, Source (Sarfaraz, et al 2020).

In the graph D, as the market would be selling the toilet paper to the price set at the P= AR=MR, it would be at the same price which would be equated to the cost. It would earn a normal profit. But too much of the suppliers of the toilet market would lead to excess prices and the market price would fall to below shut down level and operation (Sarfaraz, et al 2020).

Conclusion on Toilet Paper During Covid-19 Pandemic

It is concluded that, as COVID 19 transmission and it can be due to the touching the common things which are in public or available in the commonplace, through the toilet paper, the idea was to wipe the place and then use it with them without touching anything, For example, when opening the common doors or the windows etc. Toilet paper during the pandemic times, experiences a high demand in the market, with the availably of the resources, with the high substitutes available, a large number of producers who are also playing in the same market, so the price rise was high, but as the shortage was created, it was replenished with the large production of the toilet paper.

References for Toilet Paper During Covid-19 Pandemic

Bai, M. H. (2020). Who Bought All the Toilet Paper? Conspiracy Theorists Are More Likely to Stockpile During the COVID-19 Pandemic.

Laato, S., Islam, A. N., Farooq, A., & Dhir, A. (2020). Unusual purchasing behaviour during the early stages of the COVID-19 pandemic: The stimulus-organism-response approach. Journal of Retailing and Consumer Services, 57, 102224.

Naeem, M. (2020). Do social media platforms develop consumer panic buying during the fear of Covid-19 pandemic. Journal of Retailing and Consumer Services, 58, 102226.

Paul, S. K., & Chowdhury, P. (2020). Strategies for managing the impacts of disruptions during COVID-19: an example of toilet paper. Global Journal of Flexible Systems Management, 21(3), 283-293.

Rajasekaran, R. B., Kotecha, S., Whitwell, D., Cosker, T. D., Critchley, P., Fries, C. A., ... & Carr, A. (2020). Patient safety associated with the surgical treatment of bone and soft tissue tumours during the COVID-19 pandemic—results from an observational study at the Oxford Sarcoma Service. International orthopaedics, 44(9), 1853-1858.

Sarfaraz, S., Shabbir, J., Mudasser, M. A., Khurshid, Z., Al-Quraini, A. A. A., Abbasi, M. S., ... & Zafar, M. S. (2020, September). Knowledge and attitude of dental practitioners related to disinfection during the COVID-19 pandemic. In Healthcare (Vol. 8, No. 3, p. 232). Multidisciplinary Digital Publishing Institute.

Soldati, G., Smargiassi, A., Inchingolo, R., Buonsenso, D., Perrone, T., Briganti, D. F., ... & Tursi, F. (2020). Is there a role for lung ultrasound during the COVID‐19 pandemic?. Journal of Ultrasound in Medicine.

Usher, K., Durkin, J., & Bhullar, N. (2020). COVID‐19 pandemic and mental health impacts. International Journal of Mental Health Nursing, 29(3), 315.

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