Final answer:
The price of a diamond is influenced by multiple factors, including carat weight, clarity, color, and cut, rather than weight alone. Larger diamonds are rarer, causing their prices to increase disproportionately. Price can also signal perceived quality in market settings where there's imperfect information.
Step-by-step explanation:
The relationship between the price and the weight of an "affordable" diamond is not a simple one-to-one correlation. In the diamond market, prices increase exponentially with weight due to the rarity of larger diamonds. However, other factors such as clarity, color, and cut, also known as the 4Cs, significantly influence the diamond's value.
Diamonds exhibit a sparkling display when illuminated by white light due to their high refractive index and the proper arrangement of their internal facets which splits light into its component colors – a phenomenon known as dispersion. While the carat (weight) of a diamond contributes to its overall price, it's the combination of the 4Cs that ultimately determines its worth.
Buyers often associate higher price with higher quality, although this may not always be accurate. Price can sometimes act as a signal of quality in situations where buyers face imperfect information on actual quality metrics, leading them to infer that more expensive means better.