Assignment 10

3. This chapter discusses companies that are oligopolists in the market for the goods they sell Many of the same ideas apply to companies that are oligopolists in the market for the inputs they buy. a. If sellers who are oligopolists try to increase the price of goods they sell, what is the goal of buyers who are oligopolists? b. Major league baseball team owners have an oligopoly in the market for baseball players. What is the owners' goal regarding players' salaries? Why is this goal difficult to achieve? c. Baseball players went on strike in 1994 because they would not accept the salary cap that the owners wanted to impose. If the owners were already colluding over salaries, why did they feel the need for a salary cap?17.5.2 Problems and Applications 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: Print liturlity 163.000 5.000 diammds 1000 6.000 5.000 3.000 5.000 3.000 4.oco anon 3.000 10.000 2.000 1 1.001.".I Loco 12.000 a. If there were many suppliers of diamonds. what would he the price and quantity? b. If there were only one supplier of diamonds. what would he the prise and quantity? c. If Russia and South Africa formed a cartel. what would he the price and quantity? If the countries split the market evenly. what would he South Africa's production and profit? What would happen to South Africa's prot if it increased its production by 1.000 while Russia stuck in the cartel agreement? d. Use your answers in part [c1133 explain why cartel agreements are often not successful