Which statement best describes the profitability comparison between cuttable and industrial diamonds?

Which statement best describes the profitability comparison between cuttable and industrial diamonds?

• A. Cuttable diamonds are more profitable than industrial
• B. Cuttable diamonds are less profitable than industrial
• C. Cuttable and industrial are equally profitable
• D. Industrial diamonds are more profitable

Answer: (A)

The main idea is that value in diamonds comes from what buyers will pay for the polished gem versus the industrial use stones. Gem-quality, cuttable diamonds command a large premium per carat because they’re sought after for jewelry, have certified grading, and are rarer than industrial stones. Even after the costs of cutting, polishing, and certifying, the final selling price for a cuttable diamond is typically far above the price of an industrial diamond, yielding higher profit margins per carat. Industrial diamonds, priced for tools and industrial use, stay at much lower price points and depend more on high volumes than on high per-carat profitability. So cuttable diamonds are generally more profitable than industrial diamonds.

The main idea is that value in diamonds comes from what buyers will pay for the polished gem versus the industrial use stones. Gem-quality, cuttable diamonds command a large premium per carat because they’re sought after for jewelry, have certified grading, and are rarer than industrial stones. Even after the costs of cutting, polishing, and certifying, the final selling price for a cuttable diamond is typically far above the price of an industrial diamond, yielding higher profit margins per carat. Industrial diamonds, priced for tools and industrial use, stay at much lower price points and depend more on high volumes than on high per-carat profitability. So cuttable diamonds are generally more profitable than industrial diamonds.