00:01
So when we're talking about diminishing marginal returns and costs, we are talking about the idea that as you hire more workers or hire more capital, it might actually decrease output.
00:15
So increase in k or an increase in labor will actually decrease the quantity produced.
00:24
Now, let's think about why this could happen.
00:26
Suppose you have one worker in a, you know, a 10 foot by 10 foot by 10 foot room.
00:34
Okay.
00:35
Now you go to two workers.
00:38
One worker in 10 foot by 10 foot.
00:42
Now you have two workers in 10 foot, 10 foot.
00:44
This might increase the output.
00:45
You went from five units to seven units.
00:48
Okay...