Diamonds are formed underneath the earth under extreme temperatures and pressure. They are solely made of carbon, and differnces in temperature and pressure can cause some of a diamonds characteristics to change. There are several diamond mines that can be found around the globe but the key is that most of them are owned by a company name De Beers Consolidated Mines. To stay brief, De Beers runs a monopoly in the diamond industry. It is simple economics, you control supply and create the demand. Through other sources of secondary research, I have found that De Beers lets out assortments of diamonds to be sold as packages. Each package consists of a high number of low grade diamonds and a very low number of high grade diamonds. Once again the De Beers monopoly has successfully positioned their product in the minds of consumers, and by controlling a majority of the industry they have the authority to regulate price by adjusting the supply. All this for a piece of carbon, welcome to the diamond industry.