Supply and Demand graphs What causes shift in a demand curve: Substitute goods Diamond has many substitute goods that look similar to it such as zircon, sapphire, opal and moissanite(5). An increase in diamond price will normally increase the demand for the zircon or the other. Furthermore, diamond as luxury jewelry has gold as other substitute, so it is highly likely to increase the demand for the gold when the price of diamond increases. In spite of this, the water doesn’t have any substitute goods because nothing can replace water. Complementary goods A complement good is used with another good. There are many complement goods for the diamond such as silver, gold and platinum(6). As a result of that, if the price of the metals that used with manufacture the diamond increase, the price of the jewelry or ring for example will rise too that will lead to a reduction of the demand of the diamonds and the complements goods. Although, water has cheap complement goods such as plastic for the bottles for example, that shows easily the difference between the price of diamonds and the price of water. Income An increase of the people income means an increase of their ability to buy more goods and services. For example, if an employee has a higher position in his work he will have a higher wage that will motivate himher to buy more than before or make him buy more expensive goods or services. So if there is an increase in people’s income it means they may be more able to buy more expensive merchandise such as diamond. As a result, the demand of diamond will increase. In contrast, the demand of water will not be affected easily because the water is necessary in all the situations but may be the brand of the drinking water will cha... ... middle of paper ... ...reasing year after year while the quantity supplied is limited because diamond is one of the non-renewable resources. Moreover, it is generally expected that the demand of diamond will grow in the next years and that expectation of excess demand may result to increase the price of diamond. Excess supply It also called surplus and it occur when the quantity supplied is above the quantity demanded at the current price. For example, the supply of water is more than people demand in the current time because water is one of the renewable resources, but because people have the idea of water that it is limitless and some of people keep using the water in random or careless way that may lead to decrease the supply in the future. Furthermore, it is highly expected that the water demand will exceed supply by the next years that may increase the price of water slightly(7).
...sumption, creates emission of greenhouse gases and other harmful chemical materials. Once released into the air, it can cause environmental problems, which in turn threatens not only the environment, but also the health of the people who live in it. In order to reduce the use of energy to help protect our planet and our health, the diamond mining industry has implemented renewable energy programs to monitor energy and carbon emission. Since its beginning, mining company PHP Billiton program has saved an equivalent of one million liters of diesel fuel per year at their Ekati Diamond Mine in Canada’s Northwest Territories. The health of the environment and the health of humanity are as one. Whatever we do to our planet, we do to ourselves. Reducing energy consumption of diamond mining not only helps protect our planet, but also helps protect the health of our people.
In this case, it is a diamond cartel which has a role to play in the price of diamonds and the following essay is going to use demand and supply curves or diagrams and various other resources to explain how a cartel can affect the price of a good, but specifically a diamond. It will also illustrate how different the market for diamonds would be without the incorporation of a cartel. First and foremost, however, this essay with explain the history of both diamond market and diamond cartel creation from its proverbial “roots” here in...
If the price for one good increases, consumers will turn to a different good to satisfy their needs (Substitute Goods, n.d.), thereby decreasing demand for the original good and increasing the demand for the substitute good.
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
The quantity of a commodity demanded depends on the price of the commodity, the prices of all other commodities, the incomes of the consumers as well as the consumer’s taste. The quantity of a commodity supplied depends on the price obtainable for the commodity as well the price obtainable for substitute goods, the techniques of production, the cost of labor and other factors of production. It is supply and demand that causes a market to reach equilibrium. If buyers wish to purchase more of a commodity than that of which is available at a given price, then the price will to tend to rise. If they wish to purchase less of a commodity than that of which is available, then the price will tend to drop. Consequently, the price will reach equilibrium at which the quantity demanded is just equal to the quantity supplied.
Diamonds were not bought as a store of value, they could not be traded in the same w...
A beautiful precious diamond can last forever, but what most people do not know is that a majority of our diamonds come from Africa. The civil wars in Africa over diamonds began around 1961 and ended in 2003. Conflict diamonds were rampant and it would be difficult to say if any jewelry sold prior to 2003 was conflict free. Conflict diamonds are diamonds that have been mined and were controlled by African rebels. The rebels would use the profits from selling conflict diamonds to fund illegal activity and to purchase more weapons for their armies. While rebels had control of the diamond mines they killed approximately 4 million people and countless families were displaced.
It’s hard to imagine that a mineral could be fueling wars and funding corrupt governments. This mineral can be smuggled undetected across countries in a coat pocket, then be sold for vast amounts of money. This mineral is used in power tools, parts of x-ray machines, and microchips but mostly jewelry. Once considered the ultimate symbol of love, the diamond has a darker story. "Blood" diamonds or "conflict" diamonds are those mined, polished, or traded in areas of the world where the rule of law does not exist. They often originate in war-torn countries like Liberia, Sierra Leone, Angola, and Côte d'Ivoire were rebels use these gems to fund genocide or other questionable objectives. Even with a system known as the Kimberly process which tracks diamonds to prevent trade of these illicit gems, infractions continue as the process is seriously flawed. The continuation of the blood diamond trade is inhuman, and unethical, and in order to cease this illicit trade further action to redefine a conflict diamond, as well as reform to the diamond certification prosess is nessasary.
.... Supply and demand are not a constant, but an ever-changing model. As the supply and demand curves changed and shifted, Goodlife adapted prices and quantity to match. This scenario is easily adapted to many different aspects of supply and demand. Prices are constantly changing on the products, services bought every day, and supply and demand drove those prices.
Santarossa, B. (2004, January 13). Diamonds: Adding lustre to the Canadian economy. Retrieved November 06, 2017, from https://www.statcan.gc.ca/pub/11-621-m/11-621-m2004008-eng.htm
A change in quantity supplied is just a movement from one point to another in the supply curve. In opposite, the cause of a change in supply is a change in one the determinants of supply that shifts the curve either to the left or the right. These determinants are the resource prices, technology, taxes and subsidies, producer expectations, and number of sellers. An equilibrium price is required to produce an equilibrium quantity and a price below that amount is referred as quantity supplied of zero no firms that are entering that particular business. If the coefficient of price is greater than zero, as the price of the output goes up, firms wants to produce more of that output. As the price of the output goes up it becomes more appealing for the firms to shift resources into the production of that output. Therefore, the slope of a supply curve is the change in price divided by the change in quantity. The constant in this equation is something less (negative number always) than zero because it requires strictly a positive...
iii. India dominates the world’s cut and polished diamonds (CPD) market. In value terms, the country accounts for approximately 55 percent of global polished diamond market and nearly 9 percent of the jewellery market. According to GJEPC's provisional estimate, cut and polished diamonds registered 19.06 percent growth in exports at US$ 7.11 mn.
In “ “Blood Diamonds” and Africa’s Armed Conflicts in the Post – Cold War Era, “ Orogun (2004) said that diamonds are referring as “clean stones”. This article explains about the black market is really happening in African. I am using this article to support how the black market of diamond trades is still not regulated, and they defined it as “licit” trade.
When a suppliers' costs changes for a given output, the supply curve shifts in the same direction. For example, assume that someone invents a better way of growing corn so that the cost of corn that can be grown for a given quantity will decrease. Basically producers will be willing to supply more corn at every price and this shifts the supply curve outward, an increase in supply. This increase in supply...
That is, it is sensitive to price change, and also to the quantity demanded. This means that if many people are consuming a good, the demand is greater than if less people are consuming the good. To further clarify, take the example of attending college. In an environment where most of an individual's peers are going to attend college, the individual will see college as the right thing to do, and also attend college to be like his peers. However, in an environment where most of an individual's peers are not going to attend college, the individual will have a decreased demand for college, and is unlikely to attend.