Supply Shock
A sudden surprise event that increases or decreases output temporarily.
Investopedia Says:
When output is increased (decreased), the price of the good decreases (increases) due to a shift in the supply curve to the right (left). The above diagram demonstrates an increase in price due to a decrease in the supply of a good relative to demand.
Examples of supply shocks include unusually bad (good) weather which reduces (increases) the supply of a commodity such as wheat. Related Terms:
Demand
Demand Shock
Economic Shock
Equilibrium
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