Use the demand schedule for diamonds given in the previous questions. De Beers is a monopolist, but it can now price-discriminate perfectly among all five of its potential customers.
De Beers’s marginal cost is constant at $100. There is no fixed cost.
a. If De Beers can price-discriminate perfectly, to which customers will it sell diamonds and at what prices?
b. How large is each individual consumer surplus? How large is total consumer surplus? Calculate producer surplus by summing the producer surplus generated by each sale.