Question

Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has a. less incentive to advertise than it would otherwise have. b. more control over the price of diamonds than it would otherwise have. c. less market power than it would otherwise have. d. higher profits than it would otherwise have.

Answer 1

Answer: less market power than it would otherwise have.

Step-by-step explanation:

Following the information given that most people regard emeralds, rubies, and sapphires as close substitutes for diamonds, then it can be infered that DeBeers, a large diamond company, will have less market power than it would otherwise have.

Since the company has less market power due to other substitutes in the market, there'll be less ability for the company to fix price since customers can easily move to other products and purchase them.