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Principles of Economics - Question 1

Well, there has been panic purchasing and hoarding by the family units with the desires for months-long lockdown in the house. It is hard to buy bathroom tissue during the lockdown when numerous stores are shut down or open on a restricted time period as they were earlier (Dwivedi, 2012). The production lines and the supply chain will likewise be shut down or open with restricted limit and was affected by a great deal.

In light of this desire, the families will unnecessarily buy the tissues to store it in their homes to be utilized and consumed in the washrooms. So that they do not face any kind of shortage or scarcity in this difficult period. Thus, there is a gigantic flood of demand at each value that could be set for the bathroom tissue. This will move the supply curve to one side, causing the price at the equilibrium level of the tissue to shoot up and the amount and output at the level of equilibrium to increment funda....