Question B2 People are required to wear a mask to protect themselves and others against COVID-19. The following table sh

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Question B2 People Are Required To Wear A Mask To Protect Themselves And Others Against Covid 19 The Following Table Sh 1 (96.41 KiB) Viewed 63 times

Question B2 People are required to wear a mask to protect themselves and others against COVID-19. The following table shows the demand and supply schedule for face masks in a small city. Price (in dollar) 0 20 40 60 80 100 120 140 Quantity demanded (in boxes) 700 600 500 400 300 200 100 0 Quantity supplied (in boxes) 0 0 100 200 300 400 500 600 Table 2 (a) Draw a demand-and-supply diagram of the face masks market. Diagram not necessarily to scale but clearly labels the relevant figures of equilibrium and the values of intercepts on the price- and quantity-axes. (5 marks) (b) Suppose government decides to end the rule of wearing face mask in this small city. The quantity demanded of face masks decreased by 200 boxes at each price. (i) With the aid of your diagram of part (a), illustrates the effects of this policy on the market of face masks in this small city. Explain briefly. (4 marks) (ii) Compare to the original equilibrium situation in part (a), how do the welfare of consumers and the welfare of producers change? Support your answer with figures and calculation. Show your workings. (6 marks)