Note 1124 — Chapter I · : THE HEDONISTS

The demand curve is generally concave, and this characteristic form is just the geometrical expression of the well-known fact that when prices are low enough to be accessible to everybody the sales increase rapidly, because lean purses being much more numerous than fat ones a slight lowering of the level of prices will bring the commodity within the reach of a fresh stratum of people. It may take different forms, however. For some products, such as common salt, a considerable fall in the price will not result in a large increase in the sales. In the case of diamonds a great fall in price may cause a falling off in demand because they have become too cheap. The supply curve, on the other hand, is generally convex, because the supply, which only enters upon the scene at a certain point, is very sensible to price movements, going up rapidly with a slight increase in price. Its upward trend is soon arrested, however, because production cannot keep up the pace. It is even possible that the supply may fall off at the next point, for the simple reason that there is no more of the commodity available.