The scenario
A crop failure causes a leftward shift in the supply curve, reducing quantity supplied at each price and creating excess demand, leading to a new equilibrium at a higher price.
What is in this drawing
Read the decisions behind it.
01
Modeled supply shift as a disturbance subtracted from the nominal supply signal.
02
Used a negative feedback loop with price adjustment to clear the market.
03
Represented demand and supply as blocks dependent on price, with a summing junction for excess demand.
Use when analyzing the impact of supply-side shocks on market equilibrium, such as natural disasters, input cost changes, or policy restrictions.
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