For a normal commodity, increase in income of the consumers means increase in its demand. Accordingly, demand curve shifts rightward and both equilibrium price and equilibrium quantity tends to increase. -
In the given diagram, actual demand curve DD and actual supply curve SS intersect at point E (i.e. equilibrium point). When income of the buyer increases, the demand for normal good also rises and demand curve shifts rightward from DD to {{D}_{1}}
{{D}_{1}}.As a result, equilibrium price and quantity both are increased from
OP to {{OP}_{1}} and
OQ to${{OQ}_{1}}$.
