1)How can a natural monopoly be better for consumers than a firm facing competition?

2)Name one of the ways De Beers was able to maintain a monopoly in the diamond market.

1)It is not always the case that a monopoly is bad for consumers. A few reasons why a monopoly could benefit consumers are given below.

• Because a monopoly faces no competition, it can engage in R&D. This may not be possible in competitive markets as failed products can incur heavy losses.
• A monopoly can be efficient. If it manages to keep its costs sufficiently low, it can afford to reduce prices.
• Monopolies can also give a high-quality product to their customers even though it increases costs. This is because it doesn't have to worry about competitors producing at lower costs.

2)

De beers managed to be in a monopoly because they had control over prices. They also managed, through their tactics, to keep rival firms away from the market.

De beers have been on the market since the 20th century and have strong control over the diamond market. They managed to be in a monopoly, as either of the rival firms had joined them, and in the event that the rival firm refused to join them, they managed to cope with this situation by introducing similar products that rival firms were producing and thus removing the monopoly of the rival firm. De beers have also maintained control over prices by limiting supplies. Also, at the time of the recession, diamonds were bought at low prices and later sold at high prices. So they used these tricks to maintain a monopoly on the market.