Chapter $18$ Problems & Applications

Problems and Applications Q$1$

A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $$3,000$ per diamond, and the demand for diamonds is described by the following schedule:

$\backslash$table$[[\backslash$table$[[$Price$],[($Dollars$)]],\backslash$table$[[$Quantity$],[($Diamonds$)]]],[8,000,3,000],[7,000,4,000],[6,000,5,000],[5,000,6,000],[4,000,7,000],[3,000,8,000],[2,000,9,000],[1,000,10,000]]$

If there were many suppliers of diamonds, the price would be $$ per diamond and the quantity sold would be $$ diamonds.

If there were only one supplier of diamonds, the price would be $$ per diamond and the quantity sold would be $$ diamonds.

Suppose Russia and South Africa form a cartel.

In this case, the price would be $$ per diamond and the total quantity sold would be $$ diamonds. If the countries split the market evenly, South Africa would produce diamonds and earn a profit of $