# Economic interpretation of the concavity of the expenditure function

What is the interpretation of the expenditure function's being concave?

Suppose you consume two goods. Suppose the price of one of those goods, say $$p1$$, increases. Suppose also that, rather than rebalance your demand, you increase consumption of good one enough to maintain some given level of utility (let's say whatever level of utility you had whenever consuming goods 1,2 before the price of good 1 increased). Then your expenditure rises linearly. Suppose instead that you rebalance your demand. Then your expenditures rise but not as much as whenever you do not rebalance your demand. Thus, concavity.