4. Problems and Applications Q2 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 (Dollars) (Diamonds) 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 12,000If 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 $ Why are cartel agreements often not successful? O Different firms experience different costs. All parties would make more money if everyone increased production. One party has an incentive to cheat to make more profit