A. Refer to Figure 1. If the monopolist is unregulated and acts as a single price monopoly, identify the profit-maximizing level for each of the following:

A. The level of output: 120

B. The price: $

C. The total revenue: $

D. The cost per unit: $

E. The total cost: $

F. The profit or loss per unit: $

G. The total profit or loss: $

Identify the source of De Beers market power and explain why it faces a downward-sloping demand curve.

C. Explain why De Beers marginal revenue from selling an additional diamond is less than the price of the diamond.

Question 3: De Beers is a single-price monopolist in the market for diamonds. It supplies most of the diamonds in the market and own most of the diamond mines around the world. Suppose that De Beers' costs and revenues are illustrated in Figure 2 below. Figure 2: De Beers' Costs & Revenues $220 $200 $180 $160 $140 Cost/Revenue ($) $120 $100 AC $80 $60 Demand $40 $20 MR 0 30 60 150 180 210 90 120 Quantity