Definitely one of the most basic principles in screenwriting is character arc – the notion that characters must evolve, grow, learn, or change as the plot unfolds. The audience in general expects a character to finish the movie in a higher position than that in which he started. Life is often like that.

The arc doesn’t imply that characters will always be richer, smarter, or get the girl at the conclusion. Perhaps a greedy person would end up in jail for embezzlement and confess his misdeeds to a priest as an attempt to receive God’s pardon.

For instance, in The Silence of the Lambs (1991), Clarice Starling (Jodie Foster) starts out as a student of the FBI Academy, who’s assigned a special mission. At the movie’s resolution, Clarice has improved her investigation skills and gun technique, both of which allow her to complete her mission.

An elaborate arc will present growth in many aspects of a character’s life. In The Graduate (1967), Benjamin Braddock (Dustin Hoffman) starts as an awkward, introverted, 20-year-old young man who lives by his parent’s rules and wishes. As the story unfolds, Benjamin begins making his own choices, often against his parents’. Furthermore, through an early exposition, it is implied that Benjamin is a virgin, which changes after his affair with Mrs. Robinson (Anne Bancroft). And by the movie’s end, he also gets the girl he wanted, already wearing a wedding gown.

This is not the norm, but one powerful version of character arc is when the character arcs "down the hill." In Gone With the Wind (1939), Scarlet O’Hara (Vivien Leigh) never gives away to Rhett’s (Clark Gabble) unrelenting courtship. Rhett, in the other hand, arcs as he realizes Scarlet will never want him, so he leaves her, saying the famous line: “Frankly, my dear, I don’t give a damn!” In her despair, Scarlet denies her fate and utters: “Tara. Home. I’ll go home, and I’ll think of some way to get him back. After all, tomorrow is another day.”

A character arc can also be sad or somber. In the highly acclaimed Billy Wilder pictureSunset Blvd. (1950), one of the two main characters die, and the other one is arrested.

Character arc will not save a terrible screenplay, but will make a bad story better. Keep in mind that the audience expects it in all narrative films. There’s no magic formula to it. A fantastic a plot built in a solid structure will bring about the character arc

Found on: http://www.elementsofcinema.com/screenwriting/character-arc.html