The DeBeers Company Is a Profit-Maximizing Monopolist That Exercises Monopoly

question 157

Multiple Choice

The DeBeers Company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:

• A) be equal to the marginal cost of diamonds.
• B) be equal to the average total cost of diamonds.
• C) exceed the marginal cost of diamonds but be equal to the average total cost of diamonds.
• D) exceed both the marginal cost and the average total cost of diamonds.

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Definitions:

Romantic Relationship

A bond between two people characterized by emotional and usually sexual affection.

Reproductive Potential

The biological capability to reproduce, involving factors like the viability of gametes, fertility, and general health influencing the success of reproduction.

Good Health

A state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity.

Sexual Strategies Theory

The theory that men and women have different short-term and long-term mating strategies.