DeBeer's Manipulation of the Diamond Market

For centuries, diamonds have been regarded as one of the most valuable commodities in the world and the industry has evolved into billions of dollars. At the top, De Beers dominated the entire industry worldwide, from exploration to retail selling. However, it has a reputation of a monopolist, where it influences supply and demand. The two critical factors that De Beers carefully maintained throughout the century to remain in monopoly was to create the illusion of the scarcity of the diamonds and to keep the prices high. Realizing the benefits of the cooperation and the dangers of the oversupply, most

     In Southern Africa, there were mineral discoveries in the 1860, 70, and 80’s. These discoveries had an enormous impact on Southern Africa. These discoveries lead to a “rush” of many fortune hunters and the establishment of the town of Kimberly, which grew quickly and soon became the largest urban society in the interior of Southern Africa. Soon the diamond industry was controlled by one monopolistic company. This was one negative effect of imperialism in Africa.

A monopoly is distinguished from a monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations such that one or a few of the entities have market power and therefore interact with their customers (monopoly), suppliers (monopsony) and

Diamond is one of the most expensive gemstones. It is rare and it has difficult ways to extract. Diamond has been discoverd from thousands of years, it is the result of exposure carbon to heat under the ground over onethousand and fourhandred dgrees, and this is how diamonds are shaped. In this essay I will write , explain and compare between the four article about purpose and audence.

An Oligopoly refers to a market structure where-by the suppliers have formed some form of cartel and are acting in unison. In such a case the suppliers have the power to determine the price of the commodity and may set any price.

Cartel - firms ,especially dominant players, gather together to set up a price according to the profit maximisation in the whole market. In this case, firms act like a monopoly. The price of products of each firms is fixed, thus reduction of price competition will be achieved. Instead of pricing strategy, firms will compete each other over non-price competition, for example, advertising. Like monopoly, customers’ interest might be sacrificed because price is constructed according to the market’s profit maximisation point, whole industry can gain abnormal profit, which means customers pay more than they actually need to. According to the figure 1, price of products under cartel is set up at P because of profit maximisation E (MC=MR), and abnormal profit is PP2FG. However, cartel is illegal in many countries, including UK.

This essay supports the statement “The price of diamonds is too high”. Diamonds have always been presumed to be rare. They have been present in history as a symbol of wealth and luxury as they were so difficult to find. Nowadays diamonds are mined and are found all over the world but they are sold through a cartel. (Epstein 1982) A cartel limits the supply of a product in order to keep prices high and to limit competition. (South African Pocket Oxford Dictionary: 2002) This raises the question of whether diamonds are actually worth their price. This essay focuses on the origins and the basic theory behind the diamond cartel; the early operation of the cartel; De Beers’ strong market campaign; determining De Beers’ current

The story of these infamous diamonds all started with a fifteen year old who found a diamond in his father 's arm. The diamond business started in 1935 when “De Beers” took all control over dining prospects in Sierra Leone. De Beers are a group of companies has a main role in the exploration of diamonds, as well as diamond mining, diamond retail, diamond trading, and industrial diamond manufacturing sectors.This group was founded in 1888, and they are responsible for the problems Sierra Leone is facing today. These diamonds can be found in volcanic pipes. Diamonds are a pure form of carbon in a transparent state. Diamonds have always been a sign of wealth. Historically kings and queens were known for wearing these. Over time many people began lusting over them.

A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is

A cartel is a secret agreement between multiple firms to keep prices at a higher level than the original market equilibrium. They kind of fix the selling price by doing so. Also a cartel makes sure new competitors can’t enter the market, because when a new competitor would enter, the firms which have the cartel will all lower their prices to a level that is lower than the price of the new competitor, as a consequence the new competitor will eventually go bankrupt.

A cartel is a gathering of formally free makers whose objective is to build their aggregate benefits by methods for value settling, constraining supply, or other prohibitive practices. Cartels normally control offering costs, yet some are sorted out to control the costs of bought inputs. Antitrust laws endeavor to prevent or disallow cartels. A solitary element that holds a syndication by this definition can't be a cartel, however it might be blameworthy of manhandling said restraining infrastructure in different ways. Cartels more often than not happen in oligopolies, where there are few dealers and for the most part include homogeneous

A cartel is a group of oligopolies that come together as one firm to protect their interests. An oligopoly is a few sellers, and each seller is interdependent on others, what one does impacts other competitors. Once they have formed as one, the cartel fixes the prices for the members, so they can avoid competition prices. This is why

Diamond mining in South Africa is the main force behind the country’s economy but this has not always been the case. South Africa’s large diamond mining industry started with the discovery of a large diamond on 1886 by a young shepherd named Erasmus Jacobs. The discovery brought in many miners from different parts of the world to South Africa and this lead to the discovery of a bigger diamond in 1871. This created a diamond rush in

One of the biggest cases registered by European Commission was an investigation of vitamins cartels. A cartel is a group of similar, independent companies, which join together to fix prices, to limit production or to share markets or customers between them .

Color. Clarity. Cut. Carat Weight: These four words are what jewelers in the industry use to determine the monetary value of a diamond. However in 1947 De Beers found a way to not only boost their sales but also make a psychological necessity out of this sparkly stone, and it all began with four vastly different words, “A Diamond Is Forever” (Frances Garety), and accompanied by phrases such as “Isn’t two months’ salary a small price to pay for something that lasts forever (N.W. Ayers)?