Normally, the people of COVID-FREE LAND demand of 3,000 sanitizers and 18,000 toilet rolls. Suddenly, there is an outbreak of COVID19 and the demand for sanitizers and toilet rolls has increased to 4,000 and 20,000, respectively. How would COVID-FREE LAND meet itsnew demand. Identify and comprehensively discuss at least three possibilities or ways. State all appropriate assumptions made.
Normally, the people of COVID-FREE LAND
new demand. Identify and comprehensively discuss at least three possibilities or ways. State all appropriate assumptions made.
The demand and supply functions are considered to be among the invisible hand options for an economy to be promoted and have benefits regarding growth processes. The demand of the different products and services are based on the several conditions and determinants of the item or product. The demand and supply mechanisms are important as they allow changes in the functioning as well.
With the increase in demand for sanitizers and the toilet rolls that were earlier demanded in 3,000 and 18,000 units respectively and now in 4,000 and 20,000 units respectively, the new demand needs to be met by the Covid-free land. The ways to meet the new demand are:-
- To produce more of sanitizers and the toilet rolls simultaneously in the domestic economy.
- To import one of the items under comparative advantage and to produce the other item in the economy itself.
- To import both the items from the foreign nations and allow for meeting of the demand for the two items as they are considered important in the time of the pandemic.
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