Growth Curve

DEFINITION of 'Growth Curve'

A graphical representation of how a particular quantity increases over time. Growth curves are used in statistics to determine the type of growth pattern of the quantity - be it linear, exponential or cubic. Once the type of growth is determined a business can create a mathematical model to predict future sales. An example of a growth curve is a country's population over time.

BREAKING DOWN 'Growth Curve'

The shape of the growth curve can make a big difference when businesses determine whether to launch a new product or enter a new market. Slow growth markets are less likely to be appealing because there is less room for profit, while exponential growth could mean that the market could see a lot of competitors enter the market.