A Toronto Diamond Distributor Has Developed the First Branded Diamond

question 136

Multiple Choice

A Toronto diamond distributor has developed the first branded diamond called Hearts on Fire to help smaller retailers counter the volume jewellers' aggressive price discounting.What is this move meant to do?

• A) create a catchy phrase to promote diamonds
• B) combat the quality appeal of generic products
• C) combat low-cost production of generic brands
• D) build product identity and customer loyalty

---

Definitions:

Purely Competitive

A market structure characterized by many small firms producing identical products, where no single firm can influence the market price.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the profit beyond the normal rate of return.

Average Variable Cost

Average variable cost is the total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

MR = MC Output

The output level where marginal revenue equals marginal cost, indicating the profit-maximizing level of production for a firm.