Diane has a business baking cookies. She will use her own savings to buy the ingredients. She will bake the cookies in her famil
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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.
