The article “Rubber glove sector proving to be resilient” by The Borneo Post was posted on 25 March 2010. It records that the demand of rubber glove increasingly rise among the existing buyer for medical and healthcare usage as well as the earning of rubber glove inevitably rise in Malaysia.
Due to the outbreak of H1N1, health awareness was successfully promoted by government in order to prevent H1N1 continuity outbreak. The rubber glove sector emerged to provide a “hygiene awareness and health alert” (The Borneo Post 2010) environment, then resulted in demand and supply increasingly soared.
In this article, there are various issues will discuss with regard to the rubber glove's market in real situation. Relevant economic models and concepts would be used to provide an integrated analysis in this report. This report also examines the rubber glove market with analyzing the demand and supply, shortage, elasticity and export briefly and concisely. Finally, the brief conclusion would provide to summarize overall report.
The general description of demand is “the price of a good and quantity that buyers are willing to purchase in a defined time period.” (Irvin 2003, 51)
James (2009) stated that “demand for rubber gloves is a function of healthcare, hygiene and population size”. Most people tend to purchase more rubber glove for further protection during the period of H1N1 outbreak. In fact, H1N1 has been inexorably take away many innocent lives in Asia, therefore, increasingly healthcare awareness and hygiene conscious makes high demand of rubber glove “especially for the medical sector as they provide a barrier of protection against diseases for medical practitioners” (The Borneo Post 2010).
The non-price determinant represented by healthcare awareness and hygiene conscious. When the price increase, quantity demand simultaneously increases and presented by shifting rightward from D0 to D1, thus the new equilibrium price rises from Po to P1 and new quantity demand is increase from Qo to Q1, ceteris paribus.
Elasticity can defined as “a measure of how much one economic variable- such as the quantity demanded of a product- responds to changes in another economic variable- such as the product's price” (Hubbard et al. 2009, 96).
Price elasticity of demand is “the responsiveness of the quantity demanded to a change in price” (Hubbard et al. 2009, 97). In this article, it attributed to price inelastic for demand of rubber glove because the rubber glove was found as necessity especially during the period of H1N1 outbreak. Therefore, the changes of price are not exactly affecting the demand of rubber glove.
Price inelastic of demand for rubber glove can show as downward-sloping demand curve D0. As Figure 3.1 indicates, there are fewer changes in quantity demand from Q0 to Q1 when the price increases from P0 to P1, ceteris paribus.
On the other hand, price elasticity of supply is “the responsiveness of the quantity supplied to a change in price” (Hubbard et al. 2009, 114). In this article, it attributed to price inelastic for supplied of rubber glove because during the period of H1N1 outbreak, the production output was failed to meet the high demand of rubber glove in short period. Hence, the changes of price are not exactly affecting the quantity supplied of rubber glove.
As indicates in Figure 3.2, the price inelastic of supply for rubber glove can show as downward-sloping supply curve S0. There are fewer changes in quantity supplied from Q0 to Q1 when the price increases from P0 to P1, ceteris paribus.
Malaysia is the country which becomes “the world's largest exporter and producer of rubber glove, supplying 60%-65% of the global demand for rubber gloves.” (James 2009). The main reason is the natural rubber is the good resources to produce high quality rubber glove and this kind of rubber is generally planted in Malaysia, so the supply of rubber glove increase.
In conclusion, due to the outbreak of H1N1 around the world, then resulted in the demand and supply of rubber glove instantly soared, even the rubber glove manufacturers limited to produce more products. The government implemented many steps in promoting health awareness and hygiene conscious. As using the economic models and concepts, various factors were simplified measured in rubber glove market, in order to predict the future prospect of rubber glove sector.
The Borneo Post. 2010. Rubber glove sector proving to be resilient. http://www.theborneopost.com/?p=19397 (accessed April 17, 2010).
The Borneo Post. 2010. Hygiene awareness drives up demand for gloves. http://www.theborneopost.com/?p=21927 (accessed April 17, 2010).
James, S. 2009.Further upside.Malaysian Business,October1,22.
http://www.proquest.com.dbgw.lis.curtin.edu.au/(accessed April 16, 2010).
Irvin, B. T. 2003. Economic for Today. 4th ed. USA: Thomson, South Western.
Hubbard, R.G., A.M. Garnett, P. Lewis, and A.P. O'Brien. 2009.