Demand shift creates lasting increases in market price and profits due to artisanal nature of face masks limiting entry of new firms.

Increased production costs induce short-term profits that continue into the long run as producers maintain higher price levels.

Short-run prices increase, leading to entry and grants in the market, and in the long run, dynamic entry and exits ensure price returns to equilibrium.

Following the demand surge, producers decrease their prices due to increased competition from existing firms supplying excess capacity.