Sunday, February 21, 2010

If prices of art materials increased such as oil paints,canvases etc. wat will be the supply and demand curve?

The topic is basically the question, I know that paintings usually means that the supply curve is vertical but what if prices of art materials increase? will it effect the supply and demand curve in any way?If prices of art materials increased such as oil paints,canvases etc. wat will be the supply and demand curve?
More supply less demand.If prices of art materials increased such as oil paints,canvases etc. wat will be the supply and demand curve?
In general: 1. If supply costs increase, then the supply curve shifts up.


2. If the supply curve is vertical, a supply cost shock does not affect the supply curve.





For paintings: I would not apply the traditional supply-demand scheme here, because paintings are not homogeneous goods. Consider ';The Sunflowers'; of Van Gogh. He was not planning to paint them twice.





If you consider paintings as homogeneous goods, then the supply curve is not likely to be vertical. Consider a painter on an African market: they often paint the same painting several time for tourists and tourists buy several of them. Increasing material price will lead to an upward shift of the supply curve, meaning: a higher price and lower quantity.

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