7. Use the demand schedule for diamonds given in Problem 5. De Beers is a monopo-...

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7. Use the demand schedule for diamonds given in Problem 5. De Beers is a monopo- list, but it can now price-discriminate perfectly among all five of its potential cus- tomers. De Beers's marginal cost is constant at $100. There is no fixed cost. a. If De Beers can price-discriminate perfectly, to which customers will it scll dia- monds and at what prices? b. How large is cach individual consumer surplus? How large is total consumer sur- plus? Calculate producer surplus by summing the producer surplus generated by cach salc. Price of diamond Quantity of diamonds demanded $500 400 1 300 2 200 100 4 7. Use the demand schedule for diamonds given in Problem 5. De Beers is a monopo- list, but it can now price-discriminate perfectly among all five of its potential cus- tomers. De Beers's marginal cost is constant at $100. There is no fixed cost. a. If De Beers can price-discriminate perfectly, to which customers will it scll dia- monds and at what prices? b. How large is cach individual consumer surplus? How large is total consumer sur- plus? Calculate producer surplus by summing the producer surplus generated by cach salc. Price of diamond Quantity of diamonds demanded $500 400 1 300 2 200 100 4

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a Price discriminate perfectly is to charge each customer the exact price that hes... View the full answer