3a Antitrust laws Cooperation among oligopolies runs counter to the public interest because it leads to underproduction and high prices. In an effort to bring resource allocation closer to the social optimum, public officials attempt to force oligopolies to compete instead of cooperating. Consider the following scenario: Suppose that the owners of several major mining companies secretly meet and agree to restrict indium supply in order to boost prices. As a result of the higher price of indium, a smartphone manufacturer loses billions of dollars. This mobile company could recover three times the damages it has sustained by suing the appropriate mining companies under which of the following laws? O The Sherman Antitrust Act of 1890 O The Robinson-Patman Act of 1936 O The Celler-Kefauver Act of 1950 O The Clayton Act of 19143b Oligopolies and Cartels 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: Price Quantity (Dollars) (Diamonds) 8,000 3,000 7,00 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 If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would to S Why are cartel agreements often not successful? O One party has an incentive to cheat to make more profit. O Different firms experience different costs. O All parties would make more money if everyone increased production