Why did De Beers begin to buy rough from other producers?

Why did De Beers begin to buy rough from other producers?

• A. Because they couldn't own every mine, so they bought rough to safeguard diamond prices and ensure market stability
• B. To create a global marketing campaign
• C. To focus on diamond grading
• D. To expand into mining gold

Answer: (A)

Controlling supply to stabilize prices is the key idea. De Beers couldn’t own every diamond mine, so by purchasing rough from other producers they could pool and regulate how much material entered the market. This keeps prices from collapsing when supply is abundant and helps prevent shortages when demand rises, maintaining market stability and a steady flow for cutters and retailers. It isn’t about marketing campaigns, diamond grading, or venturing into gold mining.

Controlling supply to stabilize prices is the key idea. De Beers couldn’t own every diamond mine, so by purchasing rough from other producers they could pool and regulate how much material entered the market. This keeps prices from collapsing when supply is abundant and helps prevent shortages when demand rises, maintaining market stability and a steady flow for cutters and retailers. It isn’t about marketing campaigns, diamond grading, or venturing into gold mining.