“Diamonds are a girl’s best friend and a man’s worst enemy.” With this extension on Marilyn Monroe’s lyrics, diamonds being a man’s worst enemy can be proven to be accurate. In particular, De Beers Diamonds, a diamond industry, is an enemy to the market, being that it is among the top monopoly industries to date. De Beers is a monopoly due to having the ability to manage supply and demand, being able to control over the distribution of diamonds, and having control over the price of their diamonds, and being that nothing really compares to a diamond; there are no substitute for diamonds.
To begin, it’s essential to establish an understanding of what a monopoly is. A monopoly is a market structure that composes of only one seller, with many buyers. This gives you control over the supply and demand of the product. Unlike other market structures, there is no substitutes for the product in a monopoly, making …show more content…
De Beers had significant control of the supply of their diamonds. De Beers would have contracts in order to control their diamonds, according to the Business Insider: “De Beers and its Central Selling Organization established exclusive contracts with suppliers and buyers, making it impossible to deal with diamonds outside of De Beers.” Approximately, 45% of the rough-cut diamonds are from De Beers. To control the diamond industry, one would have to be able to own all of the diamonds. A source from Business Insider indicated that in Siberia, there was a discovering of many diamonds. De Beers would buy all of the diamonds out of Siberia because it could be a threat to the industry because instead of having multiple channels for diamonds, De Beers wanted there to be no other substitutes for diamonds on the market. They want to be the only channel for
To begin, it’s essential to establish an understanding of what a monopoly is. A monopoly is a market structure that composes of only one seller, with many buyers. This gives you control over the supply and demand of the product. Unlike other market structures, there is no substitutes for the product in a monopoly, making …show more content…
De Beers had significant control of the supply of their diamonds. De Beers would have contracts in order to control their diamonds, according to the Business Insider: “De Beers and its Central Selling Organization established exclusive contracts with suppliers and buyers, making it impossible to deal with diamonds outside of De Beers.” Approximately, 45% of the rough-cut diamonds are from De Beers. To control the diamond industry, one would have to be able to own all of the diamonds. A source from Business Insider indicated that in Siberia, there was a discovering of many diamonds. De Beers would buy all of the diamonds out of Siberia because it could be a threat to the industry because instead of having multiple channels for diamonds, De Beers wanted there to be no other substitutes for diamonds on the market. They want to be the only channel for