An increase in the supply of running shoes willassuming demand is unchanged- lead to __________ (LO7) a) an increase in equilibrium price and an increase in equilibrium quantity b) a decrease in equilibrium price and a decrease in equilibrium quantity c) an increase in equilibrium price and a decrease in equilibrium quantity d) a decrease in equilibrium price and an increase in equilibrium quantity

Supply is the quantity of a good or service that producers are willing to offer at various prices. Demand is the quantity of a good or service that consumers are willing to purchase at different prices. When the quantity supplied equals the quantity demanded, we have an equilibrium point, which is defined by its equilibrium price and quantity.

Let us assume there is an increase in the supply of running shoes, while demand remains constant. When the supply increases, suppliers are willing to sell more running shoes at a lower price. Since consumers still have the same demand for running shoes, they will buy more running shoes at these lower prices, until a new equilibrium point is reached.

Now we need to find out how the equilibrium price and quantity change when supply increases and demand remains constant. Given the scenarios: a) an increase in equilibrium price and an increase in equilibrium quantity b) a decrease in equilibrium price and a decrease in equilibrium quantity c) an increase in equilibrium price and a decrease in equilibrium quantity d) a decrease in equilibrium price and an increase in equilibrium quantity We can eliminate options a) and c) because an increase in supply would lead to a decrease in equilibrium price, not an increase. Between options b) and d), the correct answer is d) a decrease in equilibrium price and an increase in equilibrium quantity. This is because, with an increase in supply, suppliers are willing to sell shoes at a lower price, leading to a decrease in the equilibrium price. Consumers will buy more shoes at these lower prices, resulting in an increase in equilibrium quantity.