Final answer:
The observation of a decrease in price and an increase in the quantity of running shoes sold is likely due to an increase in supply. This could be influenced by technological improvements, lower production costs, or more sellers entering the market, leading to more affordable prices and higher quantities sold.
Step-by-step explanation:
When we observe a fall in the price of running shoes and an increase in the quantity of running shoes that producers sell, the most likely explanation is that there has been an increase in supply. The decrease in price occurs due to a greater supply of running shoes in the market, making them more available to consumers at lower prices. Similarly, the increased quantity sold is due to the fact that consumers benefit from the decreased prices, thereby purchasing more. Factors that could have caused the increase in supply include technological advancements, a decrease in production costs, or an increase in the number of sellers.
When we look at a common situation in business regarding the impact of price on supply and demand, it is known that prices tend to fall when there is a surplus of a product. This encourages consumers to purchase more of this product, increasing the quantity sold. This concept is a foundational element of economic theory related to demand and supply.