An explanation for how the price of water can be less than the price of diamonds,even though water is more valuable,is that

Question

Quizplus · Accepted Answer

Price reflects the marginal value of a good, meaning the value of the next unit produced and consumed. While water may be more valuable in terms of total utility, the marginal value of a unit of water is much lower than the marginal value of a unit of diamonds due to their scarcity and the amount of resources required to produce them. Therefore, the price of diamonds can be higher even though water is more valuable in the grand scheme of things. Options A and D are not accurate explanations, and while option B may contribute, it is not the main reason for the price disparity.

An Explanation for How the Price of Water Can Be