How did Cecil Rhodes stabilize diamond prices?

• A. By government price fixing
• B. Through production control to stabilize prices
• C. By reducing demand through marketing
• D. By setting fixed prices across the market

Answer: (B)

Controlling how much rough diamond material enters the market is what stabilized prices. Cecil Rhodes helped build De Beers into a tightly run cartel that coordinated mining output and how stones were released to buyers. By restricting production and

managing distribution, the supply of diamonds stayed relatively scarce, dampening price swings even when demand ebbed and flowed. This private, supply-side approach kept prices steady without needing government intervention. Marketing and other tactics didn’t reduce demand; they complemented the stable supply by supporting ongoing demand, but the core mechanism for price stability was production control.