SUPPLY SHOCK: A disruption of market equilibrium (that is, a market adjustment) caused by a change in a supply determinant and a shift of the supply curve. A supply shock can take one of two forms--an supply increase or a supply decrease. An increase in supply is illustrated by a rightward shift of the supply curve and results in an increase in equilibrium quantity and a decrease in equilibrium price. A decrease in supply is illustrated by a leftward shift of the supply curve and results in a decrease in equilibrium quantity and an increase in equilibrium price.

     See also | supply | supply curve | supply price | supply determinants | equilibrium quantity | equilibrium price | equilibrium | resource prices | other prices | substitute-in-production | complement-in-production | sellers' expectations | number of sellers | supply decrease | demand increase | demand decrease |

SUPPLY SHOCK, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: December 7, 2022].

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A principle that states that every nation, worker, or production entity has a production activity that incurs a lower opportunity cost than that of another nation, worker, or production entity, which means that trade between the two can be beneficial to both if each specializes in the production of a good with lower relative opportunity cost. This law is most often studied in the confines of international trade, but it also applies to labor and other types of production.

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