00:01
Okay, so we're going to be looking here at the relationship between substitute goods.
00:06
So you have the diamonds versus other precious minerals given as, these examples that are given there.
00:17
Rubies, sapphires, the emeralds, being closed substitutes for the diamonds.
00:25
If they're closed substitutes, we can understand that the relationship is positive between the price of one good, in this case, let's just say price of diamonds, and the quantity demanded of a substitute good.
00:46
We can just take care of an amount of emeralds.
00:53
Okay, so basically the relationship is such that the change in price of the diamond, for instance, if the original price was pure, or was demanded of emeralds.
01:07
An increase in the price of diamonds from po to p1 results in an increase in the quantity demanded of emeralds from qo to q1.
01:21
So basically what that would mean is we don't have a monopoly by the company that supplies diamonds debiers.
01:30
Okay, so looking at our responses, we look at the first response.
01:35
Ones that is offered, then de beers a large diamond company has, number one, less incentive to advertise than it would otherwise have.
01:49
This is not true because debears should actually have to increase, not reduce advert...