In 1994 the US postal service put a picture of Ben Pickett, not Bill Pickett whom it meant to honor. It printed 150,000 sheets. Recognizing its error, it recalled the stamp, but it found that 183 sheets had already been sold. a. What would the recall likely do to the price of the 183 sheets that were sold? b. When the government recognized that it could not recall all the stamps, it decided to issue the remaining ones. What would that decision likely do? c. What would the holders of the misprinted sheet likely do when they heard the government’s decision?
This is all about supply and demand among collectors. Assume supply is completely inelastic at Q=183 and Q=150000. Draw a graph and see what happens to price.
