[7.] Suppose that the marginal cost of mining gold is constant at $300 per ounce and the demand schedule is as follows:

PRICE (per oz.) QUANTITY (per oz.)
$1000 1000
$900 2000
$800 3000
$700 4000
$600 5000
$500 6000
$400 7000
$300 8000

a.) If the number of supplies is large, what would be the price and quantity?

b.) If there is only one supplier, what would be the price and quantity?

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c.) If there are only two suppliers and they form a cartel, what would be the price and quantity?

d.) Suppose that one of the two cartel memebers in part (c) decides to increase its production by 1,000 ounces while the other member keeps its production constant. What will happen to the revenues of both firms?

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