SUPPLY & DEMAND

OF MEDICAL MASK
IN VIETNAM DURING
THE COVID-19

MARCH, 2022

Teacher: Nguyen Thanh Trieu

Peformer: Group 1

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 GROUP 1
1.

2.

3.

4.

5.

6.

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 TABLE OF CONTENTS

Summary ................................................................................................................................................... 3
Chapter 1. Theoretical background ...................................................................................................... 4
Theoretical of Demand and Supply..................................................................................................... 4
Chapter 2. What has been happening in the reality?............................................................................ 8
Chapter 3. What would you suggest improving the situation? .......................................................... 10
Conclusion ............................................................................................................................................... 12
References ............................................................................................................................................... 13

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 SUMMARY

The COVID-19 pandemic, also known as the coronavirus pandemic, is a global coronavirus disease
pandemic that began in 2019 and is still ongoing. It is caused by severe acute respiratory syndrome
coronavirus 2 (SARS-CoV-2). In December 2019, the novel virus was discovered in an epidemic in the
Chinese city of Wuhan, and attempts to contain it there failed, allowing it to spread around the world. The
outbreak of the pandemic has posed unprecedented problems, and is expected to have a significant impact
on Vietnam's economic growth. The healthcare industry plays an important role in Vietnam's economy.
A branch of the healthcare industry - the medical mask has seen significant changes throughout the
COVID-19. Large changes in consumers demand, as well as shortages from suppliers, have been observed
in the market. Besides that, the government has implemented certain market-stabilizing policies. Under
those circumstances, our group chooses the topic “Supply & demand of medical mask market in Vietnam
during the COVID-19 pandemic” to evaluate the market's benefits and drawbacks, as well as to determine
the best solution to the market's problems. Our group wishes our topic can contribute to developing the
medical mask market including developing Vietnam’s economy.

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Chapter 1: Theoritical Background

Theoretical Supply and Demand:

a) Demand:

● Definition:

Demand is the quantity of a good or service that buyers are able and willing to buy at different prices in
a given time, with other conditions unchanged.

● Quantity demanded:

- The quantity demanded of any good is the amount of the good that buyers are willing and able to
purchase.

● Law of demand:

- The quantity demanded of a good falls when the price rises, other things being equal.

- In other words, price and quantity demanded have an inverse relationship.

● Demand schedule:

- The demand schedule is a table that shows the relationship between the price of a good and the
quantity demanded.

● Demand curve:

- The demand curve is a graph of the relationship between the price of a good and the quantity
demanded.

- When one of these factors changes, the demand curve shifts.

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 ● Individual demand and market demand

- The individual consumer's demand for a good or service is individual demand.

- The market demand for a good or service is the sum of all individual demands for that good or
service.

● Shifts in the Demand Curve:

- Any change that raises the quantity that buyers wish to purchase at any given price shifts the demand
curve to the right. - Any change that lowers the quantity that buyers wish to purchase at any given price
shifts the demand curve to the left.

- Consumer
income

- Prices of related goods:

+ Additional goods

+ Substitutes

- Tastes

- Buyer's expectations

- Number of buyers

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b) Supply:

• Definition:

- Supply is the quantity of a good or service that producers are able and willing to supply at different
prices in a given period of time, with other conditions being constant.

● Quantity supplied:

- The quantity supplied of any good or service is the amount that sellers are willing and able to sell.

● Law of supply:

- The quantity supplied of a good rises when the price of the good rises, other things being equal.

- In other words, price and quantity supplied are directly related

● Supply schedule:

- The supply schedule is a table that shows the relationship between the price of a good and the
quantity supplied

● Supply curve:

- The supply curve is a graph of the relationship between the price of a good and the quantity
supplied.

- When one of these factors changes, the demand curve shifts.

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● Individual supply and market supply:

- The supply of each producer for a certain good or service is the individual supply.

- The market supply of a good or service is the sum of all the individual supplies of that good or
service.

● Shifts in the Supply Curve:

- Any change that raises the quantity that sellers wish to produce at any given price shifts the
supply curve to the right.

- Any change that lowers the quantity that sellers wish to produce at any given price shifts the
supply curve to the left.

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 ● Factors affecting supply:

- Input prices

- Technology

- Expectations

- Number of sellers

Chapter 2: What has been happening in the reality?Theoritical Background

1. Demand for medical masks during the Covid pandemic

The unpredictable epidemic situation has caused a sharp increase in the demand for face masks.
People have gradually raised their awareness of health protection, thereby proactively preparing
products for epidemic prevention and control. Because the epidemic situation is complicated, causing
the number of cases to increase rapidly, it is difficult to supply medical masks in large quantities in a
short time. Meanwhile, the demand for medical masks has increased rapidly. Many families buy to keep

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at home, which has led to a greater demand than supply. Consumers increase their purchases, but raw
materials for the production of masks are scarce, making businesses unable to supply enough of
consumers' needs. Due to the simultaneous increase in prices of businesses in the mask manufacturing
industry, customers' choice for other products increased. Especially, ordinary households with a living
income are not eligible to buy masks at the current price to use. Because consumer demand is high, but
the supply is not enough, it leads to the phenomenon of jostling to buy medical masks.

People flocked to the Hapulico drug market (Hanoi) to buy medical masks (March 31, 2020).

2. Supply of medical masks in Vietnam during the pandemic

Facing the complicated development of the acute respiratory infection caused by a new strain of
Coronavirus, people have massively sought to buy medical masks to use to prevent this dangerous
disease. Due to greater demand than supply, the price of masks increases from 120,000 VND to 150,000
VND per box instead of 40,000 VND to 50,000 VND before. In order to avoid unreasonable price
increases, fines have been applied and besides, the number of masks exported to the market is gradually
increasing to meet the needs of consumers. Medical masks can be freely exported from the end of April
2020 according to Resolution No. 60/NQ-CP dated April 29, 2020 of the Government on the export of
medical masks, in the direction of unlimited quantity, help domestic enterprises promote export of this
product. For the whole year of 2020, Vietnamese enterprises exported more than 1.37 billion medical
masks of all kinds.

The latest statistics from the General Department of Customs show that in October 2021, the whole
country had 14 major firms exporting medical masks of all sorts totaling more than 37 million units
which is two times higher than the export volume recorded in September 2021. Accumulating 10
months from the beginning of 2021, Vietnamese enterprises have exported more than 359.34 million
medical masks of all kinds. Of which, 12.53 million units were exported from July, down 37.5%
compared to June. August increased by nearly 25% with 15.64 million units. September increased 6.6%
with 16.63 million units and last October spiked 123.3% with 37.14 million units.

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 Figure 1. Export of medical masks from July-October 2021

Chapter 3: What would you suggest to improve the situation?

Due to the limited supply of goods, there is a shortage of goods for disease prevention, especially
medical masks. That is the act of “Abusing abnormal conditions to sell goods unreasonably”. The
Information Management Department of the provinces has urgently coordinated with relevant
authorities to handle according to the law to soon bring the confiscated masks to the market to meet the
needs of the people.

In order to combat speculation, increasing the prices of commodities when the demand for products is
high, it is necessary to direct and take part in the drastis actions of the whole political system from the
central government to ministries, branches and localities. Besides, it is necessary to strengthen the
channels to receive, process information reported by the people in order to strengthen supervision,
because the authorities can not have enough forces to serve inspection activities. Along with that,
functional branches need to propagate and disseminate the law so that people do not violate it.

Changes in the demand or supply of goods and services that result in unusually high or low prices can
cause certain segments in society to gain and lose unfairly. To avoid abnormally high prices, the
government can set a floor price, price ceiling, and according to the law, prices can not fall below that
price. In both cases, the government tries to achieve equity in the distribution of goods and services.
The disadvantages of ceiling and price floors is that it can not prevent markets from moving to
equilibrium. It can cause a surplus or scarcity that is more severe and prolonged than a free market
situation. In addition, the government should have strict penalties for areas selling high prices, such as
requiring fines, revocation of business eligibility certificates.

* Price ceiling (Pmax) is the required maximum price, in order to adjust the price lower than the
desired price. Sellers are only willing to supply an amount of Qs less than the equilibrium quantity, but
the buyer wants to buy a quantity of Qd greater than the equilibrium quantity.

* The floor price (Pmin) is the required minimum price, in order to adjust the price above the
equilibrium price of the market. Floor prices are set to protect the interests of producers.

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CONCLUSION

The fight with the Covid-19 pandemic is an unending war of Vietnam in particular and of the world
in general. It has caused the whole world to struggle in all aspects from politics, economy to health. The
whole world is still struggling to fight it. And so is our Vietnam. The whole world has been highly
appreciating Vietnam's anti-epidemic results over the past year. That has demonstrated the relentless
efforts of Vietnam and the government when both fighting the epidemic and fighting criminals profiting
from the trading of fake masks and Covid-19 drugs. Currently, the mask market in Vietnam has stabilized,
with an abundant supply in time to meet market demand when the pandemic is unstable. However, the
heat of the market for masks has never cooled down while the pandemic is becoming more and more
complicated. Therefore, the state needs to continue to promote strict policies and laws to minimize
fraudulent trading activities. And consumers must consciously choose good and reputable products to be
able to ensure their personal health, and act to help eliminate low-quality and cheap goods.

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 REFERENCES

1. Kinh tế học, Đại học Kinh Tế Thành phố Hồ Chí Minh, 2005.
2. Internet.
3. Trâm Anh. (2021). Việt Nam xuất khẩu gần 360 triệu khẩu trang y tế, tăng đột biến 120% trong
tháng 10. VnEconomy. Retrieved from https://vneconomy.vn/viet-nam-xuat-khau-gan-360-
trieu-khau-trang-y-te-tang-dot-bien-120-trong-thang-
10.htm#:~:text=%C4%90%E1%BA%BFn%20th%C3%A1ng%205%2F2020%2C%20s%E1%B
B%91,trang%20y%20t%E1%BA%BF%20c%C3%A1c%20lo%E1%BA%A1i.
4. Nhân Bình. (2020). Covid 19 trở lại - Khẩu trang y tế lại tiếp tục “thổi giá”. Công an Kon Tum.
Retrieved from https://congan.kontum.gov.vn/phong-chong-dich-benh-covid-19/covid-19-tro-
lai-khau-trang-y-te-lai-tiep-tuc-thoi-gia.html

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