Suppose cach member of a diamond cartel consisting of five producers agrees to sell 100 carats of diamonds per day. A total of 500 carats are sold each day. If the market price is $1,000/carat, each firm earns $100,000 per day. Now suppose that one producer cheats by producing 110 carats, causing the market price of the new output of 510 carats to drop to $980/carat.

a. The cheating firm's total revenue changes to of S107,800 fall $7,800 $110.000 risc $2,000
b. The total revenue of each of the remaining fo to of $98,000 $10,000
c. Suppose the four noncheating firms change course and all produce 110 carats, and the market price of the new output of 550 carats drops to $850/carat. Each firm now earns per day
d. The foregoing developments give rise to a Prisoner's Dilemma True