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Not an economist by far, just a layman, and that's a layman question.

How is this possible that it's difficult to find mask for the Corona Virus? I have been several times to 7/11, boots, Watson, and other pharmacies, and everytime they did not have it as they ran out. How is it possible that the producers of masks give up on additional earning by not producing more masks, now that it's pretty obvious the demand is going up?

The fact that there are not enough masks is my personal experience in Bangkok - however, some friends of mine have the same experience in Italy, where the Corona Virus outbreak has reached a scary stage.

Generally. I would explain capitalism failure by pointing at government regulations - however in this case I don't see how the government can be involved into mask production. Any idea?

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  • $\begingroup$ In essence, not too different from what happened to solar-eclipse glasses two years ago fox13now.com/2017/08/16/… $\endgroup$
    – Martin Van der Linden
    Commented Feb 24, 2020 at 13:52
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    $\begingroup$ "Generally. I would capitalism failure by pointing to government regulations" Could you proof read this please? Idk what you're trying to say $\endgroup$
    – Alexander
    Commented Feb 24, 2020 at 21:10
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    $\begingroup$ while not directly related to economics, it should be noted that most of those masks (procedure masks) do not actually do anything to help you from being infected, in patient care settings they are either for people who are already sick or for doctors who want their saliva (or a patients blood) from going where it should not go. $\endgroup$
    – Richie Frame
    Commented Feb 24, 2020 at 21:43
  • $\begingroup$ Thumbs down for the whiny rant. $\endgroup$
    – RonJohn
    Commented Feb 24, 2020 at 21:58
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    $\begingroup$ @KennyLJ for viruses, a half mask respirator primarily protects someone by preventing them from touching their mouth and nose with their hands. Only a HEPA grade filter like N100 or P100 will block enough aerosolized virus to possibly prevent infection, and even then the virus will live on the mask surface. You need a mask impregnated with citric acid or copper ions to kill the virus. Simply removing a contaminated mask with your bare hands can result in infection, so you also need to wear rubber gloves and discard them after removing the mask $\endgroup$
    – Richie Frame
    Commented Feb 25, 2020 at 5:49

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This is a common problem in many domains. For example, there's massive new demand of Airbus planes after the Boeing 737 Max 8 disaster, and their manufacturing capacity is maxed out.

I'm familiar with it from the domain of software development, so I'll use that as an example.

Suppose some website gets mentioned on Reddit and the post happens to hit the first page. It gets the "Reddit hug of death" (the swarm of reddit users overwhelm the website's servers, and it becomes unavailable). You could ask the same question:

How is it possible that the producers of [this site] give up on additional earning by not [spinning up more servers], now that it's pretty obvious the demand is going up?

If that "additional earning" (of having more of your product available to provide) is less than it costs to permanently over-provision a resource (web servers, mask production factories, etc.), then it's not economical to do so.

Cloud infrastructure is becoming incredibly liquid, because resources are very flexible and can be pooled. A high traffic day for my website might be a low traffic day for yours. A cloud provider could scale down your site (saving you money) by uninstalling your software from a server, reassigning that server to me, and use it to scale up my site by installing my software on it (raising my infrastructure costs, but also raising my business' income because it hasn't gone down). There are even auto-scaling systems that can scale your service up and down in response to current load. There's still some lead time, on the order of a few minutes for web server virtual machines.

The real world is much less flexible than software. If masks are in hot demand, but construction helmets aren't, you can't re-purpose the injection molds for hard hats into face-mask stitching machines. There are many factors involved in deciding whether or not its worth in investing to grow the mask manufacturing business:

  1. How many masks are available in reserve? In the warehouses of factories and distributors, in hospitals, in military bases, etc.
  2. How long do we think this epidemic will last? Will it last long enough to deplete the reserves? Is it long-term enough to justify the high up front expenses?
  3. How much marginal profit is there to be made in selling these extra masks?

Interestingly, this problem repeats itself and plays itself out upstream in the supply chain. Are the companies that make mask-stitching machines able to produce enough for the new demand? What about their upstream supply chain?

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The supply of masks can't keep up with soaring demand because mask producers have capacity constraints in the short run. See this recent article.

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  • $\begingroup$ it is interesting that the first image of masks being produced in that article are particulate intake respirators with an exhalation valve, which would provide 0 protection for others from a sick individual wearing the mask. those types of masks are for things like paint removal and wood sanding $\endgroup$
    – Richie Frame
    Commented Feb 24, 2020 at 21:51
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Exacerbating the short-run supply matter, these kinds of masks aren't actually for healthy people to keep pathogens away. They're for sick people to keep from spreading pathogens. So not only is "appropriate" demand spiking due to the virus spreading, "mistaken" demand is spiking due to fear - and I am comfortable making the data-less claim that this second effect is much larger.

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