South Africa, with large natural diamond deposits, is famous for its diamond exports. The international demand for diamonds for industrial and other purposes, such as jewelry, has led to the production of synthetic diamonds by other countries, such as the United States. Which answer BEST describes the concept highlighted in this scenario?
A) International cooperation has been reduced over the years.
B) Consumers prefer synthetic diamonds to natural ones.
C) Prices provide incentives for sellers.
D) Markets are no longer linked together.

Question

Quizplus · Accepted Answer

The scenario highlights the concept of demand and supply in a market. The international demand for diamonds has led to the production of synthetic diamonds, which provides an incentive for sellers to produce more diamonds. This, in turn, affects the price of natural diamonds as it reduces the demand for them. Therefore, the best answer is C, which states that prices provide incentives for sellers. The other options are not relevant to the scenario.

South Africa, with Large Natural Diamond Deposits, Is Famous for Its