00:01
So here we have a solo model, right? and the solo model is making predictions about the amount of capital, right? so we have capital, we have output, and we have this curved line output.
00:13
And this is reflecting diminishing returns, right? that's why output is curved like that.
00:21
We have an investment line, and the investment line is a proportion of output, right? and so it inherits the same curvature because it's just a proportion of output.
00:34
But the depreciation line looks like this, right? the depreciation line looks like this.
00:41
And the idea, the more factories you have, the constant it is.
00:45
So the example that we want to use here is this is going to increase us, right? so when we have a new depreciation line, what happens is that the slope gets steeper...