Which of the following explain why the price of water per gallon is lower than the price of a diamond per carat? Multiple select question. Water is in low supply relative to demand and thus has a very low price per gallon. Diamonds have high marginal utility, and therefore, their price is very high per carat. Water is in great supply relative to demand and thus has a very low price per gallon. Diamonds are in small supply relative to their demand, thus their price is very high per carat.