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: see attached 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. If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would _increase or decrease________ to. Why are cartel agreements often not successful? Choose one below: a. One party has an incentive to cheat to make more profit. b. Different firms experience different costs. c. All parties would make more money if everyone increased production.
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: see attached 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. If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would _increase or decrease________ to. Why are cartel agreements often not successful? Choose one below: a. One party has an incentive to cheat to make more profit. b. Different firms experience different costs. c. All parties would make more money if everyone increased production.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
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.
diamonds. If the countries split the market evenly, South Africa would produce_____________diamonds and earn a profit of.
If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would _increase or decrease________ to.
Why are cartel agreements often not successful? Choose one below:
a. One party has an incentive to cheat to make more profit.
b. Different firms experience different costs.
c. All parties would make more money if everyone increased production.
Transcribed Image Text:Price
Quantity
(Dollars) (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
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