Looking at the graph, if there is an increase in income for the households in this market, what is the MOST LIKELY result? Quest
ion 6 options: The supply curve will become a vertical line. The equilibrium price will fall. The demand curve will shift to the right. The demand curve will shift to the left.
2 answers:
The correct answer is: "the demand curve will shift to the right".
Households are the economic agents whose will defines the demand curve. This curve represents combinations of prices and amounts demanded by them. In the case, the income has increased for all households within a market, the demand curve shifts right, which means that quantity component of all combinations has increased, and that at the same price more amount of the good is demanded by the consumers.
Such a shift is represented in the graph attached.
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