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 |
