How does an increase in income affect the demand for normal goods?

When there is an increase in income, the demand for normal goods tends to increase at every price level. Normal goods are those that consumers purchase more of as their income rises. This relationship arises because with higher income, consumers have greater purchasing power, allowing them to buy more of these goods.

For example, if a consumer's income increases, they may choose to buy more expensive clothing, dining out more frequently, or upgrading to higher-quality products. As a result, retailers will observe an increase in demand for these goods, shifting the demand curve to the right. This adjustment indicates that, at each price point, the quantity demanded has increased due to the rise in income.

In contrast, if income were to decrease, one might expect demand for normal goods to decrease as people would curb their spending. Therefore, option C accurately reflects the positive correlation between rising income and demand for normal goods.