(Answered) why is knowing the effect of a shock on supply and demand importantwhy is knowing the effect of a…

➤ When should policymakers intervene after a shock?
Policymakers intervene when shocks cause large welfare losses, persistent shortages, or severe price volatility that markets cannot quickly correct. Intervention is more likely for essential goods, liquidity crises, or clear market failures. Officials typically choose temporary measures—subsidies, liquidity support, or price stabilization—while evaluating long-term structural fixes.