Explain how much profit will the perfectly competitive firms

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Reference no: EM1344902

A majority of the world & acirc diamonds come from South Africa. Assume the Marginal Cost of mining diamonds is constant at $2,000 per diamond, and the demand for diamonds is described by the following table:

Price Quantity
$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

A.) If diamonds are produced by perfectly competitive firms, what quantity of diamonds will be produced?
B.) Explain how much profit will the perfectly competitive firms earn?
C.) If diamonds are produced by a single monopoly firm, how many diamonds will the firm produce?
D.) Explain how much profit will the monopoly firm earn?

Reference no: EM1344902

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