Final answer:
True, shifts in the supply curve or demand curve lead to changes in the equilibrium price and quantity. These shifts indicate changes in quantity supplied or demanded at every price point, and the new equilibrium is found at the point where the new supply or demand curve intersects with the other curve.
Step-by-step explanation:
True, when a supply curve or a demand curve shifts, this indicates that there is a change in the quantity supplied or demanded at every price. Consequently, the equilibrium price and equilibrium quantity will change as the new intersection point between the supply and demand curves is established. If the supply curve shifts due to changes in production costs or other factors, it affects the equilibrium position. For instance, an increase in production costs would likely cause the supply curve to shift to the left, leading to a higher equilibrium price and lower equilibrium quantity.
The magnitude of these changes also depends on the elasticity of the demand. More elastic demand tends to cause a smaller increase in price and a larger decrease in quantity when the supply shifts, while more inelastic demand results in a larger price increase and a relatively smaller decrease in quantity, as demonstrated in Figure 5.11.