Why is are demand curves concave?
1 Answer
Demand curves can be concave, convex or form straight lines. In each case, the rate of change in quantity demanded as price decreases forms the changing angle of the curve. A steep demand curve means that price reductions only increase quantity demanded slightly, while a concave demand curve that flattens as it moves from left to right reveals an increase in quantity demanded when low prices drop even slightly lower. Intuitively, the quantity demanded would tend to zero as the price increased to infinity and the quantity demanded would grow very large as the price approached zero, however I would agree on the principle of Utility there so much that you can buy at low prices. So my intuition tells me that the preponderance of demand curves are most likely concave.
