Supply Shocks: The Real Reason Egg Prices Went Crazy

Why TVs got cheap and eggs got expensive.

3 min readQuick check inside

The big idea

When something changes the cost or ability to produce, the whole supply curve shifts. Shift left and prices rise. Shift right and prices fall.

When bird flu forced farms to cull millions of laying hens, there were fewer eggs at every price. The supply curve shifted left, and with demand roughly the same, the price shot up. That’s a supply shock.

It works the other way too. Better technology and cheaper manufacturing made flat-screen TVs far cheaper to produce, so supply shifted right. More TVs at every price meant prices fell. That’s the “shift right” rule.

Supply shifts come from input costs (gas, feed, wages), technology, weather and disease, the number of sellers, and expectations. A rumor can change supply overnight. Because gas moves almost everything, higher gas prices quietly push up the price of other products too.

Spot it in the wild

GasFuel is an input to nearly everything shipped, so gas prices ripple through grocery prices.
By-productsCheap leather can start with expensive steak. When ranchers raise more cattle for beef, hides become plentiful.
FarmingFarmers bet billions every spring on what to plant, months before they know the price.

Quick check

Tap an answer.

A drought destroys half the coffee crop. What happens?

Less coffee can be produced at every price, so supply shifts left and the price rises.

Keep watching