Please answer the following question:
What is a supply shock? Explain the differences between a beneficial and an adverse supply shock.
Supply shock is "an unexpected event that changes the supply of a product or commodity, resulting in a sudden change in its price" (Investopedia, 2012).
Adverse supply shocks "include things like increases in oil prices, a drought that destroys crops, and aggressive union actions. In general, adverse supply shocks cause the price ...
Positive and adverse supply shocks are determined.