Let me give some background first.

Can you tell me the relation and difference between a homogeneous and a
homothetic function? In the following Venn diagram, U is the set of all
functions and T is the set of all homothetic functions and H is the set of
homogeneous functions. A homogeneous function is always homothetic but a
homothetic function may not be always homogeneous. It means that there
may be some non-homogeneous functions which are still homothetic. We
also know that every homothetic function is some monotonic transformation
of a homogeneous function. Mathematically every homothetic function can

be written as T x, y H x, y

where . is a strictly increasing

function of one variable and H x, y is a homogeneous function. Thus if we

make a composite function of a strictly increasing function and a
homogeneous function the resulting function may not remain homogeneous
anymore but it would still be a homothetic function. What property of a
homogeneous function would be preserved even after a monotonic
transformation? For every homogeneous function, the slope of the level curve
are constant along any ray from origin making every level curve of the function
just a radial expansion of the other. Since

Tx
H x
H

x function
Ty
H y
Hy

for the resulting function T (homogeneous or not), the slope of the level curve are still constant along any ray from
origin and every level curve of the new function is still just a radial expansion of the other. Thus this property of the
homogeneous function is preserved for (shared by) a homothetic function.
Analogically speaking is there also some property sharing relation between a concave (convex) and a quasi-concave
(quasi-convex) function?
Yes there is. But before I tell you what it is let us first define the level set, upper level set and lower level set of a
function defined over a certain set S .
Level set (also called level curve or surface) of a function is the set of those input combinations for which the value
of the function is equal to some
constant
value.
Mathematically
speaking the level set of f x is given
by

x S f x a

where a

is

some level (value) of the function.

Upper level set of a function is the set
of those input combinations for which
the value of the function is equal to or
greater than some constant value.
Mathematically speaking the upper
level

set

of f x

is

given

by

U a x S f x a where a is
some level of the function.
Lower level set of a function is the set
of those input combinations for which

the value of the function is equal to or lower than some constant value. Mathematically speaking the upper level set
of f x is given by La x S f x a where a is some level of the function.

Note that the level set forms a part of (in fact the boundary) of both the upper and lower level sets. Level set at a is
thus the intersection of U a and La . Moreover S is the union of U a and La for all a .
Now comes the turn of the relation between a concave (convex) and a quasi-concave (quasi-convex) function.
Every concave (convex) function has a property that its upper (lower) level sets are convex. Is there any function
which is not concave (convex) but still has upper (lower) level sets which are convex sets? Yes there are functions
which share this property with concave (convex) functions.
A function is (strictly) quasi-concave over S if and only if the upper level set of the function for all its levels is a
(strictly) convex set. The function on the LHS in the figure above is strictly quasi-concave as its upper level sets
(represented by the area under the circle) are strictly convex sets. Note that the function is also concave but that is
not necessary.
A function is (strictly) quasi-convex over S if and only if the lower level set of the function for all its levels is a
(strictly) convex set. The function on the RHS in the figure above is strictly quasi-convex as its lower level sets
(represented by the area under the circle) are strictly convex sets. Note that the function is also convex but that is
also not necessary.
A quasi-concave (quasi-convex) function is to a concave (convex) function what a homothetic function is to a
homogeneous function. A quasi-concave (quasi-convex) function is also a strictly increasing transformation of a
concave (convex) function. For example, f x

x defined for x 0 is concave and its fourth power

f x x 2 is convex but f x x 2 is also quasi-concave as the upper level sets (intervals on the real
4

number line) are convex sets. A composition of an increasing function and a concave function may fail to preserve
concavity but preserve the property that upper level sets would be convex.
Note here that
1. A convex function of one variable is also quasi-concave. In fact a strictly convex or concave function of one
variable is both quasi-concave and quasi-convex provided it is monotonic (increasing or decreasing).
2. If some upper level set of a continuous function of two variables is a convex set then the lower level set of
that function for the same level will be convex if and only if the level curve of the function is a straight line. It
means that a continuous function of two variables is both quasi-concave as well as quasi-convex if and only if
it is a plane.
3. f is (strictly) quasi-concave (quasi-convex) f is (strictly) quasi-convex (quasi-concave)
Note that the level curve of a function f at some value a is same as the level curve of f at its value a .
Moreover if at some input combination f a then f a . This implies that the upper level set of f at
some value a is same as the lower level set of f at its value a making the above equivalence true.
What is the relation between concavity (convexity) with quasi-concavity (quasi-convexity) in general?
1. Function is concave it is quasi-concave
2. Function is convex it is quasi-convex
How would you prove these?
Well here you would start always with what you need to prove and use what you already know. For example in
second you need to show that the lower level set of the function at any level is a convex set. In order to do that you
take any two points belonging to a general lower level set and show that the convex combination of these two

points also belongs to the set using the fact the function is convex. Let the lower level set is La x S f x a
a
where a is some level of the function. Let x1 and x2 L . This implies that f x1 a as well as f x2 a . Now

let us a take a point other than these two in the convex combination of these two points. Such a point would be

x x1 1 x2 for some value of 0,1

. Now since function is convex

f x f x1 1 f x2 a 1 a a
Therefore x must belong to the lower level set (as it satisfies f x a ) making the lower level set convex and the
function quasi-convex.
We know that the sum of two concave (convex) functions is also concave (convex). Is
the sum of two quasi-concave (quasi-convex) functions also quasi-concave (quasiconvex)? May not be. We can show that by just providing a counter example.
Suppose f x x3 and g x x . Both these functions are both quasi-concave
and quasi-convex as they are monotonic functions of one variable. But

f g x3 x is neither quasi-concave nor quasi-convex. It is because the sum is

not a monotonic function.
Since a quasi-concave (quasi-convex) function is just a strictly increasing transformation of a concave (convex)
function, a strictly increasing transformation (composition) of quasi-concave (quasi-convex) function will also
remain quasi-concave (quasi-convex). How to prove this?
Let f x be a quasi-concave (quasi-convex) function and g . be a strictly increasing function of one

variable then we have to show that h x g f x is also quasi-concave (quasi-convex). Let us take two

points x1 and x2 U a La of f x . Since f x is a quasi-concave (quasi-convex) function x U a La .

Mathematically speaking, if f x1 a and f x2 a then f x a . Since g . is strictly

increasing function of output of f it means that if g f x1 g a and g f x2 g a then

g f x g a . The last statement means that if

x1 and x2 U g a Lg a of h x then

x U g a Lg a , making h x g f x also a quasi-concave (quasi-convex) function.

Now let us understand some properties of the level curves of a quasi-concave function of two variables.
All the four upper level sets shown below are strictly convex sets. It means that the two-variable functions which
these upper level sets represent must be quasi-concave (in fact strictly quasi-concave as there is no linear portion in

d2y
the level curves). If you notice that the sign of the second derivative of level curves of the function 2 is same
dx
f
as the sign of the first order partial derivatives of the function f y
.
y

Therefore the moral of the story is that a function is quasi-concave over a certain subset of the input space of f if
either of the following two conditions is met all over that set
1.

f y 0 and

d2y
0
dx 2

Or

2.

f y 0 and

d2y
0
dx 2

Note that whenever level curves have linear portions then

d2y
would equal 0 but the upper level set would still be
dx 2

convex and the function from which this upper level set has come would still be quasi-concave (though not strictly
quasi-concave).
Another question that you may ask is that what should happen to quasi-concavity either of f x and f y equals 0? Well
since

f
dy
x . If f x 0 then level curves would have linear and flat portions (where f x 0 ) where and function
dx
fy

would thus be quasi-concave if none of the above two conditions are violated. Similarly if f y 0 then level curves
would have linear and vertical portions (where f y 0 ) and function would thus be quasi-concave again if none of
the above two conditions are violated.

If ever in the set of input combinations where we are checking for the quasi-concavity of the function, any of the
above two conditions are violated as follows:

f y 0 and

3.

d2y
0
dx 2

Or

f y 0 and

4.

d2y
0
dx 2

then our function of two variables will not be quasi-concave.

But then would it be quasi-convex over that set? Yes provided 3 and 4 are satisfied all over that set. Thus we also
have the sufficient conditions when a function of two variables would be quasi-convex. One way to see why this is so

d2y
0 , i.e. f is not
dx 2
quasi-concave. Since f y 0 , f y 0 but f y is the first order partial derivative w.r.t. y of the function f .
is to remember that f is quasi-concave f is quasi-convex. Now if suppose f y 0 and

Moreover you should see that the level curves of any function and its negative are always same which means that

d2y
0 for the level curve of f as well making it a quasi-concave function and in turn making f a quasi-convex
dx 2
function.

For a function of two variables,

d 2 y d fx
1

3
2
dx
dx f y
fy

f f 2f f f f f
xy x y
yy
x
3
xx y

fy

0
Thus quasi-concavity demands that f x
fy

fx
f xx
f xy

0
Similarly quasi-convexity demands that f x
fy
signs.

0
fx
fy

fx
f xx
f xy

fy
f xy provided f y 0 .
f yy

fy
d2y
f xy 0 all over the set as then 2 and f y would have same signs.
dx
f yy

fx
f xx
f xy

fy
d2y
f xy 0 all over the set as then 2 and f y would have opposite
dx
f yy