The carat of a diamond is determined by the weight of the diamond. The bigger the diamond, the higher the carat weight. One carat is equal to 200 milligrams. The carat of a diamond will determine the value and price of the gemstone.
The price of a diamond rises exponentially as the carat weight increases. The value of a diamond of 2.00 carat is more likely triple the price (and not double) of a 1.00 carat diamond with similar characteristics.
Especially the symbolic value of carat for diamonds cannot be overstated. For example, the difference between a 0.98 ct. diamond and one of 1.01 ct. can hardly be seen, but their prices might be much further apart than you would expect. The difference in price can be explained by the fact that we cross a ‘magic size’. Magic sizes are, for example, 1 carat, 1.50 carat or 2 carats. Once we reach that magic size, the price increases exponentially.