Diamond market stabilises after small dip last year



The article refers to the recent efforts by the leading Diamond producer to contain the market price of Diamonds by cutting down production, increasing advertising and discounts. Apart from this , there are external pressures on Market Demand resulting from falling incomes because of worldwide Recession.


Topics include Determinants of Supply, Price and Non Price determinants of Demand and Price Elasticity of Demand. Explain using the diagrams showing the combined effect on the market price under the influence of supply and demand through restricted production and advertising and discounts.


Evaluation will cover the effectiveness of Producer’s efforts and Consumer response in short term and long term. Since Diamond is perceived as a luxury good, discuss the effect of discounts on the Market Demand for Diamonds.