Assignment_Three

Assignment_Three - Fall Quarter 2005 Assignment Three (30...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Fall Quarter 2005 Assignment Three (30 points) – This assignment is worth 2.5% of your grade Due on Monday November 14, 2005, in class. Please note that I do not accept late assignments. 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 $1,000 per diamond, and the demand for diamonds is described by the following schedule: 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 there were many suppliers of diamonds, what would be the price and quantity? b) If there were only one supplier of diamonds, what would be the price and quantity? c) If Russia and South Africa formed a 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? d)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Assignment_Three - Fall Quarter 2005 Assignment Three (30...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online