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Consider the example of OpenAI developing ChatGPT that we used in class. Suppose that if Sam Altman (CEO of OpenAI) runs the company by himself
Consider the example of OpenAI developing ChatGPT that we used in class. Suppose that if Sam Altman (CEO of OpenAI) runs the company by himself he is able to develop/launch ChatGPT, but because he is only good at development and not marketing, only 1 million people learn about the technology and pay for subscriptions. However, if he hires a second employee to do the marketing, 10 million people will learn about the technology and pay for subscriptions. In other words, there is a high fixed cost of building ChatGPT, but the marginal cost of scaling up is relatively small. In this example, OpenAI's production function (with Y, or ChatGPT subscriptions, on the vertical axis, and L, or number of workers, on the horizontal axis) is ________ at a(n) _________ rate. a) (increasing, increasing) b) (increasing, decreasing) c) (decreasing, increasing) d) (decreasing, decreasing)
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