Question

Questions:
Buyers determine demand while sellers determine supply. Both laws of supply and
demand establish market forces that make economies work to search for their market
equilibrium. The impact of COVID-19 is an unprecedented event that affects the
global economy. In the article, the overall retail sales dramatically dropped by 34.8%,
with jewellery and luxury goods drop of 67% but supermarkets increase of 12%, in
the first five months of 2020. However, online-based consumption, like demand for
food delivery, online education (Zoom), stay-at-home activities and online grocery
shopping surged dramatically since the outbreak of pandemic.

1) Illustrate with TWO real examples (one favourable and one adverse impact) in the
retail industry in Hong Kong or Mainland China or your country to show your
understanding and application of supply and demand as well as elasticity

Answer 1

1) Sale of personal hygiene products including Hand Sanitizers and Mask inIndia during the early stages of Pandemic saw the supply pressure where the demand surged drastically and supply was not matching up to demand causing shortage and few of supplier benefitting from it since Demand was Inelastic too in wake of pandemic. Similarly private vehicle demand surged post lockdo na as people was wary of travlling in public transport because of the risks.

Onthe other side of it demand fell for consumer durable ex vehicles because of the prevailing economic scrnario where people are cautious on their Consumption spend, further during the period imports were also affected leading to slight increase in prices which didn't help either, other example of hospitality and airlines is well known across the globe how those companies have been drastically impacted because of pandemic