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Supply and Demand Essay: Quaternary Ammonium

Supply and Demand Essay: Supply and Demand of Quaternary Ammonium Compound: Lysol all-purpose cleaner

Quaternary ammonium is a compound used as a low-level disinfectant for routine cleaning in hospitals against fungi, enveloped virus, and most bacteria. There has been an increase in the demand for disinfectants in general households, clinics, and hospitals driven by the Quaternary Ammonium Compounds market. The demand for Lysol All-Purpose Cleaner, a QAC, has increased since 2020 due to the COVID-19 pandemic due to the increased need for disinfecting and sterilizing surfaces in the healthcare setting. Therefore at the beginning of the COVID-19 pandemic, there was a massive upward movement along the demand curve of this commodity. Therefore, as the quantity of the Quaternary Ammonium Compounds demanded increased, the price too increased.

Supply and Demand essay

This is expected to continue over the next six years, and the Quaternary Ammonium Compounds (QAC) market is expected to rise to US$1.63 billion. Over the year, the demand for aerosol disinfectants increased by four hundred percent, with the online market increasing by 63 percent (Baker et al., 2020). The massive increase of the product at the beginning of the year 2020 involves the fact that some suppliers were hoarding the product in anticipation of increased demand for the commodity over the year.

Lonza Inc. increased the prices of Quaternary Ammonium Compounds by twenty percent before the onset of the COVID-19 pandemic. The manufacturers of this commodity have more control of the market relative to the consumers in healthcare facilities. This is because the QACs products high-value products, especially in the surfactant industry, making high-value chemicals. However, over time, the increased price has led to an increase in the supply for the commodity, thus leading to a slight upward shift in the supply curve. The upward shift in the demand curve would dominate the upward shit in the supply curve, thus leading to an overall increase in the commodity price.

Supply and Demand Essay: Lysol All-purpose Cleaner

The market price of a 19-ounce Lysol all-purpose cleaner increased from $4.25 to $9.15 over the first quarter of 2020. This was even though there was no change in the cost of production of this Quaternary ammonium compound (Baker et al., 2020). This can be attributed to the increase in the demand for the commodity during that period. Therefore there was a demand rise in the commodity, thus making the demand curve shift to the right.

Supply and Demand essay

This demand rise allowed the suppliers to increase the commodity’s price without the fear that the quantity demanded would reduce. Some government officials and members of the public pointed that this was unlawful exploitation of the consumers. However, this is evidence of the capitalistic marketplace whereby the marker forces determine the demand of a commodity. However, the Quaternary ammonium compound had become a necessity in the hospital setting.

Supply and Demand Essay: Price

The increased price of the commodity encouraged the manufacturers to continue supplying more of the commodity. Therefore the supply curve of the commodity shifted upwards, representing a supply increase. The suppliers would have the ability to supply a commodity whose price margin had also increased. However, the increase in the supply of the commodity was not significant enough to offset the price increase due to the increased demand.

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The manufacturers of QUATs were incentivized to ensure a constant supply of the product in the market. The impact of the COVID-19 pandemic on the Quaternary Ammonium Compounds (QAT) like Lysol all-purpose cleaner to have a dominant demand rise, something that is expected to increase over the foreseeable future. The government’s attempt to control the compound’s market effect may reduce the manufacturer’s supply, but the dominant demand rise would persist, leading to persistent high product prices.

Supply and Demand essay

Supply and Demand Essay Reference

Baker, N., Williams, A. J., Tropsha, A., & Ekins, S. (2020). Repurposing quaternary ammonium compounds as potential treatments for COVID-19. Pharmaceutical research37, 1-4.

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