Suppose that the firm could have invested 20,000 hours of engineering time in the
design work instead of 10,000 hours, and by so doing, could have designed a 30 megabyte
hard disk drive that could be manufactured with the same factory and workers. When the
firm doubles all of its inputs, it uses a 20,000 hour design, 2 factories, and 200 workers and
produces 6 trillion megabytes of storage per year, 3 times the output original output.
More formally, if F(A,X) represents a production process that depends on rival
inputs X and nonrival inputs A, then by a replication argument, it follows that