Concave Function

A function f(·) is strictly concave if, for any positive weights w1 and w2 such that w1 + w2 = 1, then

w1·f(a1) + w2·f(a2) < f( w1·a1 + w2·a2 ).

Two common examples are the log function y = log(x) and the square root function y = √x.

See also convex function.

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Call Option

Concave Function

Consumer Surplus

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Convex Function

Deadweight Loss

Demand Curve

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