Final answer:
A decrease in the quality of workers in an O-Ring Model suggests an increase in the failure rate for tasks, and hence, a likely escalation in diminishing marginal productivity, potentially reaching the stage of negative returns sooner.
Step-by-step explanation:
When the quality of the workers falls in a standard O-Ring Model of production, it implies that the failure rate of tasks or products may increase. This model, where the output is determined by the number of workers multiplied by the quality of output for each task, can be influenced by the marginal product of workers. The general rule of diminishing marginal productivity indicates that as a firm employs more labor, there comes a point when the additional output produced declines. This is typically because the fixed capital becomes an increasingly limiting factor, leading to a stage where additional workers contribute less and less to production or could even have a negative impact on total output.
In this context, if we assume that the quality of workers deteriorates, it could mean that each added worker would now generate lower output compared to before, and thus the diminishing marginal productivity kicks in sooner. If this decrease in worker quality is significant, the company may even reach the stage of negative returns more quickly, where adding more workers results in a decrease in the total output due to factors such as overcrowding and decreased efficiency.