Answer to Question #189368 in Microeconomics for azis

Question

The fact that the Malaysian government has intervened in the face mask market indicates that it has no

confidence that the market is good enough to allocate the face mask in an efficient manner. Do think the Malaysian government’s intervention is necessary or redundant? Justify your answer.

Answer 1

Solution:

The intervention by the Malaysian government in the face mask market is necessary.

This is because the COVID-19 pandemic has witnessed multiple and catastrophic instances of market failure in health. Issues such as failure in supply chains to deliver the required face masks and other personal protective equipment efficiently resulting in market inadequacy and suppliers taking advantage of consumers through hiking prices have been rampant. This has adversely affected the fight again the COVID-19 pandemic.

 

Therefore, it is vital for the Malaysian government to get involved in the face mask market to bring sanity and ensure everything is running perfectly and efficiently. This is one of the efficient strategies by the government to contain the COVID-19 pandemic to relieve the negatively impacted public health and the country’s economy. The government will ensure that the face masks are readily available to everyone by supporting the market through boosting supply chains and offering subsidies for the face masks to make them affordable to the public at large. By making sure the public is receiving and wearing masks, the COVID-19 infection rate will be managed and hence avoid exhausting limited hospital resources.