How is the equilibrium price and equilibrium quantity of a normal commodity affected by an increase in the income of its buyers? Explain with the help of a diagram.
OR
x is a normal good for its consumers. Their income increases. Explain its chain of effects on equlltbrium price, demand and supply of X. (use diagram)

Explanation

An increase in income of the consumer leads to increase in demand for the commodity or a rightwards shift in the demand curve. The increase in demand leads to competition among buyers causing a push in the market price. The increased price leads to an increase in the supply and a fall in demand leading to a new equilibrium where both the price and quantity demanded are higher.