Between 1986 and 1998 the De Beers company controlled the world diamond market. De Beers and its affiliated association of producers restricted diamond sales to maximize profits. De Beers and its association was "the only game in town" and had what is
A) a cartel.
B) a duopoly.
C) monopolistic competitor.
D) perfect competitor.

Question

Quizplus · Accepted Answer

De Beers and its affiliated association of producers restricting diamond sales to maximize profits indicates that they had formed a cartel, where they colluded to control the market and prices of diamonds. A cartel exists when there is an agreement among businesses to limit competition, which allows them to maintain high prices and profits.

Between 1986 and 1998 the De Beers Company Controlled the World