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The Diamond Water Paradox Principle

According to the diamond water paradox, water is needed to sustain human life, yet it has no value in front of diamonds even when diamonds have no such specific use except to be used as jewelery or in industrial machinery. This phenomenon can be explained by the economic theory of marginal utility and the law of supply and demand. The supply of water is in such a large quantity that its most urgent use, which is drinking to remain alive, is easily fulfilled. Therefore, any additional unit of water can be applied to less urgent uses resulting in a less worth for people due to a greater supply. Comparatively,  the supply of diamonds is so low that the usefulness of one diamond is greater than a glass of water, therefore, people are willing to pay a greater amount for diamond as compared to water. We can apply the same concept to explain the reason why an athlete earns so much money. It takes a lot of time and effort to become a professional athlete. Not everyone is capable of becoming a pro athlete; therefore, the supply of a professional athlete is far less than other professions such as engineers, doctors, accountants etc. Moreover, there is an international demand for athletes as they are being liked by numerous fans that are willing to pay a large amount to buy tickets to see their favorite athlete compete. An athlete with a larger number of fans has a higher salary as compared to an athlete with a less number of fans. So, being in a less quantity ( low supply) and a large number of fans ( high demand) results in a high marginal utility of professional athletes, therefore their salaries are high and they make so much money by showing their performances to the audience.