Question

How did the De Beers cartel try to maintain control of the price in the diamond market? How was this control been undermined?

Answer 1

Solution:-Here mostly De Beers cartel try to maintain control of the price in the diamond market for a long time.De Beers kept their price high by limiting the supply of rough diamonds mined elsewhere. The company withheld diamonds from the market when necessary to maintain the price acting as a price maker. De Beers also used marketing efforts to shore up demand for diamonds.The cartel's price control depended on maintaining control of the key resource—the rough diamonds. De Beers' price control was lessened by new entrants into the market, such as Russia, Australia's Argyle mines, and Yellowknife in Canada.