The marginal cost of mining diamonds is constant

Assignment Help Business Economics

Reference no: EM13832746

A large percentage of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $1,000. per diamond, and the demand for diamonds is described by the following schedule

Price, $ Quantity, diamonds

10,000 3,000

9,000 4,000

8,000 5,000

7,000 6,000

6,000 7,000

5,000 8,000

4,000 9,000

3,000 10,000

2,000 11,000

1,000 12,000

If Russia and South Africa formed a profit maximizing cartel, what would be the price and quantity? If the countries split the market evenly, what would be South Africa’s production and profit? What would happen to South Africa’s profit if it increased its production by 1,000 while Russia stuck to the cartel agreement? What would happen to Russia’s profit?

Reference no: EM13832746

Questions Cloud

State the issue holding and the court rationale : For your initial posting of no less than 350 words, please state the issue(s), holding and the court's rationale for its holding. Also, state whether you agree with the court's decision explaining your position

Describe about chinatown encounters plague : Chinatown Encounters Plague

Leisure and consumption goods are perfect substitutes : Suppose, alternatively, that leisure and consumption goods are perfect substitutes. In this case, an indifference curve is described by the equation i = al + bC, where a and b are positive constants, and u is the level of utility. Show what the consu..

Using appropriate demand-marginal revenue and cost curves : Using appropriate demand, marginal revenue and cost curves, show graphs for the following situations. (Be sure to label the axes and curves and use numbers on your graphs to demonstrate that your graphs correctly show the condition specified in the q..

The marginal cost of mining diamonds is constant : A large percentage of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $1,000. What would happen to South Africa’s profit if it increased its production by 1,000 while R..

Compare the multiplexing techniques tdma and fdma : What is the purpose of a mixer? Include a discussion of sidebands in your answer. Compare and contrast the multiplexing techniques TDMA and FDMA in the area of wireless networking.

Medical expenditures for treatment of ischemic heart disease : A sudden escalation in the utilization rates and, correspondingly, medical expenditures for treatment of ischemic heart disease (a procedure usually covered by insurance) would immediately. Insurance coverage of which treatment would likely cause the..

How much is cost of goods manufactured : How much is cost of goods manufactured. Is this necessarily the same as cost of goods sold. Why or why not

Fiscal and monetary policies before next general election : If you were the leader of your country and you had control of fiscal and monetary policies, what would you likely do with the use of fiscal and monetary policies before the next general election?

User Account

All Pages