Dramatic Structure and Purpose
The purpose of a story arc is to move a character or a situation from one state to another; in other words, to effect change. This change or transformation often takes the form of either Aristotle's tragic fall from grace or a reversal of that pattern. One common form in which this reversal is found is a character going from a situation of weakness to one of strength. For example, a poor woman goes on adventures and in the end makes a fortune for herself, or a lonely man falls in love and marries.
Another form of storytelling that offers a change or transformation of character is that of "hero's journey," as laid out in Joseph Campbell's theory of the monomyth in his work, The Hero with a Thousand Faces. Christopher Vogler's The Writer's Journey: Mythic Structure for Writers details the same theory specifically for western storytelling.
Story arcs in contemporary drama often follow the pattern of bringing a character to a low point, removing the structures the character depends on, then forcing the character to find new strength without those structures.
Read more about this topic: Story Arc
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