“The fundamental diagram” describes the relationship between traffic flow (q) (throughput, or vehicles per hour pass a point), density (k) (vehicles per unit distance), and speed (v) (how fast those vehicles are going distance per hour). This can be expressed as an equation:

q=kv

So why does the “Fundamental Diagram” have the shape it does?

When density on the highway is zero, the flow is also zero because there are no vehicles on the highway. As density increases, flow must increase if speed is constant. It turns out, that we can drive the speed we want to, unaffected by other drivers, at lower densities. So if there is only 1 car per kilometer, you travel at what is called “freeflow speed”, and if there are 2 cars per kilometer, or 5 cars per kilometer, you are still largely unaffected by the other cars. However as density rises, you are eventually slowed by other vehicles.

There is a maximum throughput (capacity), determined by the minimum following headway. In good conditions, drivers can travel at freeflow speed up to that point, but then congestion sets in, and as more cars are added, everyone slows down. At jam density, flow is also zero.