Undoubtedly, marginal cost curves are shown as a being non-linear in order to show the effect of a very important concept, diminishing returns. Because the marginal cost curve is thought to decline to a minimum, from which point it steadily rises, a linear marginal revenue curve will cross it twice, the initial intersection being unprofitable and the second being the profit maximizing intersection. The singularity of a profitable equality of marginal cost and marginal revenue was questioned in 1982 in the April issue of Economic Inquiry by John P. Formby, Stephen Layson, and W. James Smith, who demonstrated the possibility of positively sloping marginal revenue curves whenever a convex demand curve is under consideration. More recently, in partnership with Steven R. Beckman, Smith has reasserted his belief in a positively sloping marginal revenue curve. Their views were later reinforced by Diane and Daniel Primont.
Textbooks often show linear marginal utility curves and linear demand and marginal revenue curves.
However, it is not rare for them to be shown as being convex. However, R. D. G. Allen in his seminal work in mathematical economics believed individual demand curves might be s-shaped. 3d per lb. The shape of such a family demand curve can vary, of course, over a wider range for different families and different goods. It is clear that acquiring a second automobile for use over a given period of time has a lesser utility to a person than does the first automobile.