The De Beers diamond mining and marketing company of South Africa became one of the most profitable and longest-lived monopolies in history. Which of the following has always threatened De Beers' control of the diamond market?
A) At different times in the past some countries have banned the importation of diamonds from South Africa for political reasons.
B) Competition from imitation diamonds. Technology has made it possible to make fake diamonds look exactly like real diamonds.
C) Competition from other gemstones, including rubies and emeralds, that have become more popular over time.
D) Since few diamonds are ever destroyed, De Beers has constantly faced possible competition from other firms reselling diamonds.
D
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Assume that there is rent control in Chicago. Which of the following is true?
A) All consumers in the rental market will benefit because the rent will be lower. B) The total surplus will fall because there will be a shortage of apartments. C) The total surplus will rise because consumer surplus will increase. D) Consumer surplus will increase and as a result all consumers in the rental market will benefit.
According to the substitution effect, if the price of a product goes down
A. the consumer will not change the level of purchases of the good when the price changes, making the demand curve a vertical line. B. the consumer will buy more of the good at the lower price than at a higher price, creating a downward sloping demand curve. C. the consumer will buy more of the good at a lower price than at a higher price, creating a horizontal demand curve. D. the real income of the consumer will increase, causing the consumer to want to buy more of the good, creating a downward sloping demand curve.