Assume that the arrival rate of innovations to a firm employing the factor
combination (z, s) and aiming for innovations of size y is A4(z, s)v(y), where
v'(y) < 0; the bigger the innovation, the harder it is to discover. Assume
v"(y) < 0; the marginal cost (in terms of lower arrival rate) of aiming for larger
innovations increases with the size of innovations. Then the product yv(y) is a
concave function of y.