How would an increase in consumer income, an external shock, affect the supply and demand curve in a market where the law of supply holds?

When consumer income increases, people generally have more money to spend, which can lead to higher demand for goods and services. This shift in demand means that consumers are willing to buy more at any given price, causing the demand curve to shift to the right. For example, if a new video game console is priced at $300, and consumers have more income, they might be willing to buy more consoles at that price, increasing the overall demand. Meanwhile, the law of supply states that producers are willing to supply more goods as prices rise, so suppliers may respond by increasing production to meet the higher demand. This interaction between increased demand and supply can lead to higher prices and more goods available in the market.