A prolific artist, Pablo Picasso (1881-1973) painted 1,000 paintings during what is known as his “Blue Period”, and all thousand paintings are on display and hanging in galleries throughout the world.
a) Draw the supply curve for Picasso’s Blue period works. Why is this supply curve different from other ones you have seen that follow the Law of Supply?
b) Given your answer to a), the price of a Blue Period painting will be entirely dependent on what factors? Draw a diagram showing how the price of such paintings will be determined.
c) Suppose rich art collectors decided that it is essential to acquire Picasso Blue period art for their collections. Show in a diagram the impact on the market for these paintings.