What is the quickest way to resolve problems from a supply shock?
a decrease supply
b rationing
c lower prices
d raise prices

The correct answer is D.

If there is a supply shock in the markets, the amount supplied by producers is decreased suddenly and abruptly. Therefore, the total output produced is located below the equilibrium price and the desires of producers and consumers no longer match. In fact, there is an excess of demand.

In order to allocate the output among potential customers, market forces will function and prices will rise. Less people will be willing to purchase the product at a more expensive price and, therefore, amount supplied and demanded will come closer until the succesive price rises allow them to meet again.

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