Question

The “Inverted Jenny” is a rare U.S. postage stamp that was issued in 1918.  What makes it unusual is that the Curtiss JH-4 plane in the center of the stamp was printed upside down by mistake. Only 100 of these stamps were ever sold, and they are highly prized: in November 2018, one sold for almost $1.6 million.

The price of the Inverted Jenny has fluctuated widely over time.  Use a demand and supply diagram to show and explain the effect on the price of an Inverted Jenny as a result of each of the following:

1. The 2008 financial meltdown: many of the buyers of rare stamps are Wall St. financiers.
2. An Inverted Jenny gets sucked into a vacuum cleaner and gets badly damaged. [This actually happened.]
3. A block of four Inverted Jennies gets destroyed in a fire. [This is hypothetical.]

Answer 1

Solution A

Since many of buyers experience financial meltdown the demand for stamps will be negative And thus prices will crash.

Solution B

This will lead to adverse supply shock and thus its demand will increase than supply causing prices to go up.

Solution C

This will have marginal impact and prices will not change much as only four of Jennies get destroyed, however prices will increase marginally.