How do supply and demand influence the equilibrium price in the context of significant market shocks, and what role do consumer and producer surplus play in this adjustment process?

Significant market shocks can cause sudden shifts in supply and demand, leading to changes in the equilibrium price. When demand increases or supply decreases, equilibrium prices rise. Conversely, when demand decreases or supply increases, prices fall. Consumer and producer surplus adjust accordingly, with consumer surplus decreasing when prices rise and producer surplus increasing, and vice versa.

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