Definition
Concavity describes the direction in which a curve “bends” or “opens.” It is a measure of the rate of change of the slope (the second derivative).
Why It Matters
It allows us to predict whether a trend is accelerating or slowing down, which is critical for optimization and risk assessment.
Core Concepts
- Concave Up (Convex): is increasing; . The tangent lines lie below the curve.
- How to read: “The second derivative f double prime is greater than zero.”
- Meaning: Slope is rising as increases—the curve cups upward like a bowl.
- Concave Down: is decreasing; . The tangent lines lie above the curve.
- How to read: “The second derivative f double prime is less than zero.”
- Meaning: Slope is falling—the curve bends downward like an arch.
- Inflection Point: A point where the concavity changes (where changes sign).