Should diamonds be considered highly sought-after luxury goods, traded and sold in such extravagant quantities? Although some people may be under the impression that diamonds are being sold at lavish prices, due to limited supply, it is my opinion that a very cleverly created cartel is concealing the very reason why these "rare" gemstones ” are apparently worth your “pretty penny”. Given the integration of such a cartel into the diamond market, I believe it is fair to say that the price of diamonds is set above what is reasonable. This essay will expose the role of the diamond cartel in limiting the high prices charged by all those involved in the sale of diamonds. (Levenstein, Suslow, 2008: Cartel) states that cartels are agreements or associations between or companies, with the aim of fixing prices and/or limiting production. These can operate in several ways, from rigging auctions to separating their businesses from each other, giving the impression that they are the only suppliers of a specific product in a certain area and thus limiting the offer in their respective area. On average, cartels last about five years and then disappear, often for legal reasons, since cartels are most often illegal. In this case it is a diamond cartel that has a role to play in the price of diamonds and the The following essay will use demand and supply curves or diagrams and various other resources to explain how a cartel can affect the price of a good, but more particularly of a diamond. This will also illustrate how different the diamond market would be without the incorporation of a cartel. However, first and foremost, this essay explains the history of the diamond market and the creation of the diamond cartel from its proverbial "roots" here middle of paper......immediately lowering the price of diamonds. Sometimes, as in the case of Soviet diamonds being of the best quality, De Beers could not always do what it wanted and then had to negotiate lower selling prices with Soviet buyers in order to prevent the Soviets from flooding the market. with their own diamonds. This cartel's demand was primarily driven by advertising and in 1948 its world-famous statement "A Diamond Forever" won over consumers like never before. This associated the idea that the diamond was an "heirloom", thus diminishing the chances of a boom in the diamond resale market. They were considered “priceless,” in the same way as love: something that is simply immeasurable. De Beers ingeniously encourages consumers to purchase their finest and rarest diamond cut, to serve as a talisman of love for their "associates". ».”.