RooftopTheorem

RooftopTheorem - Rooftop Theorem for Concave functions This...

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Rooftop Theorem for Concave functions This theorem asserts that if f is a differentiable concave function of a single variable, then at any point x in the domain of f , the tangent line through the point ( x,f ( x )) lies entirely above the graph of f . You should draw a picture. Theorem 1. If f is a continuously differentiable concave function of a single variable, defined on a real interval I , then for all x 1 and x 2 in I , f ( x 1 ) + ( x 2 - x 1 ) f 0 ( x 1 ) f ( x 2 ) . Geometrically, this theorem says that the tangent line to the graph of f passing through any point ( x 1 ,f ( x 1 )) must lie entirely on or above the graph of f . You should draw a couple of pictures to convince yourself of this geometry. Proof. Since f is a concave function, it must be that for all x 1 and x 2 in I , and all t [0 , 1], f ((1 - t ) x 1 + tx 2 ) (1 - t ) f ( x 1 ) + tf ( x 2 ) . (1) Rearranging terms, we see that Equation 1 is equivalent to f ( x 1 + t ( x 2 - x 1 )) - f ( x 1 ) t ( f ( x
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This note was uploaded on 12/25/2011 for the course ECON 210A taught by Professor Bergstrom during the Fall '09 term at UCSB.

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RooftopTheorem - Rooftop Theorem for Concave functions This...

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