Why was a product well suited to monopolization

Assignment Help Microeconomics
Reference no: EM13184257

In 1866, a child walking along the Orange River in South Africa picked up an odd-looking pebble that turned out to be a 21-carat diamond. That discovery on a farm owned by Johannes De Beers sparked the largest diamond mine in history. When the Great Depression caused a slump in diamond prices, De Beers Consolidated Mines undertook successful efforts to control the world supply of uncut diamonds and to increase consumer demand for cut diamonds. The company was able to increase consumer demand through a carefully tailored marketing program. De Beers spends about $200 million a year trying to convince people that diamonds are scarce, valuable, and perfect reflections of love. De Beers' slogan, "A diamond is forever," sends several messages, including (1) a diamond lasts forever, and so should love; (2) diamonds should remain in the family and not be sold; and (3) diamonds retain their value.

Why was this product well suited to monopolization? How could De Beers use its monopoly position to increase demand? How did it maximize its profits? Were there substitues or complements that were impacted by De Beers action?

Reference no: EM13184257

Questions Cloud

Explain what is the mole fraction of solute : What is the mole fraction of solute and the molal concentration for an aqueous solution
Explain the failures to mitigate the looming trouble : Where (i.e., what industries, countries, regions) the problem will affect the most When the problem started and how long it took for it to become a serious threat to garner the nations attention Whythe problem was allowed to develop and materialize i..
Compute the concentraion of the deprotoned form : Data from a lab experiment to calculate the concentraion of the deprotoned form of p-nitrophenol in the solution that we made up which consisted of:
Relevant international accounting standards : By using the regulatory discussions and relevant international accounting standards (IASs) which are taught in the module APC311, you are required to provide a critical evaluation of the following areas of financial reporting.
Why was a product well suited to monopolization : When the Great Depression caused a slump in diamond prices, De Beers Consolidated Mines undertook successful efforts to control the world supply of uncut diamonds and to increase consumer demand for cut diamonds. The company was able to increase c..
State osteo imperfecta displays a wide range of symptoms : Osteo imperfecta displays a wide range of symptoms for mild to servere. On the bases of amino acid and collagen structure,
State electrophilic aromatic substitution reactions : Substituents on an aromatic ring can have several effects on electrophilic aromatic substitution reactions. Substituents can activate or deactivate the ring to substitution,
What happens to firm stock price : Investors know for sure that the CEO of firm A will undertake an investment that will yild $100 million profit next year and then $2 million each year after that for 10 years. They also know for sure that the CEO of firm B will undertake an invest..
Calculate the heat capacity of the calorimeter : Compute the heat capacity of the calorimeter in J/K assuming that no heat leaks or out of the calorimeter.

Reviews

Write a Review

Microeconomics Questions & Answers

  Compute the value of the marginal propensity to save

Compute the value of the marginal propensity to save. Compute the amount of autonomous planned spending, Ap, given that the interest rate equals 5. Compute the equilibrium level of income, given that the interest rate equals 5.

  Is the measure stabilizing or destabilizing

Some states are required to balance their budgets. Is this measure stabilizing or destabilizing? Suppose all states were committed to a balanced budget philosophy and the economy moved into a recession. What effects would this philosophy have on t..

  What is the firms per-unit profit

What is the equilibrium quantity in this market and what is the equilibrium price in this market and what are the resulting output, revenue, cost, and profit of the typical firm?

  Why is the demand for water price-inelastic

Why is the demand for water price-inelastic and in those regions where outdoor use of water makes up relatively large portion of total use, the price elasticity is high. Why?

  Explain third degree price discrimination

Which diagram should use to explain third degree price discrimination relating to sub-prime borrower discrimination?

  Analyze the steps of agenda setting and policy formulation

Examine the steps of agenda setting, policy formulation, and policy implementation for a public policy on energy and evaluate factors that may influence agenda setting, policy formulation, and policy implementation energy policy.

  What are the firm economic profits

The marginal revenue curve of a monopoly crosses its marginal cost curve at $30 per unit, and an output of 2 million units. The price that consumers are willing and able to pay for this output is $40 per unit.

  How many cars to fix per week?

Suppose that Dent Carr's long-run total cost of reparing s cars per week is c(s) = 2s^2 + 50. If the price he receives for repairing a car is $8, then in the long run, how many cars will he fix per week if he maximized profits?

  Economic structure and possible future actions of opec

You have been contracted by an economic consulting company to estimate the economic structure and possible future actions of OPEC, Organization of Petroleum Exporting nations.

  Domestic interest rate would affect international investment

Explain how a +0.5% adjustment in domestic interest rates would affect international investment flows. Determine if such a change would have a bigger impact on larger or smaller countries.

  What is meant by rationality

What are the costs of making those "systematic mistakes"? Is it possible to act "irrationally," or is rationality defined by the individual's approach to decision making?

  Impact on the equilibrium price and quantity

Show, using supply and demand analysis, impact on the equilibrium price and quantity of new Hybrid automobiles when following occurs. Using graphs, explain the change in equilibrium price and quantity,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd