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Curves (concave and convex curves in economics)
When graphing relationships between two variables, economists often use curves to represent those relationships. Two common types of curves used in economics are concave and convex curves.
A concave curve is a curve that is bowed inward. In economics, a concave curve is often used to represent the relationship between the quantity of a good or service and its price. As the price of a good or service increases, the quantity demanded typically decreases at an increasing rate. This is reflected in a concave curve.
A convex curve is a curve that is bowed outward. In economics, a convex curve is often used to represent the relationship between the quantity of a good or service and its cost. As the quantity of a good or service produced increases, the cost of producing an additional unit typically increases at an increasing rate. This is reflected in a convex curve.
The shapes of these curves are important because they can provide insights into the behavior of consumers and producers in various economic situations.
