Demand for fixed-supply assets causes price appreciation

Steps:

• Identify the problem: Prices of dead artists' paintings rise continuously.
• Note supply constraint: Dead artists produce no more paintings, so supply is fixed.
• Analyze demand: If demand grows, prices increase due to basic supply-demand law.
• Evaluate choices: Select factor boosting demand without increasing supply.

Why B is correct:

• B reflects growing demand from viewing paintings as appreciating assets, per the law of supply and demand where rising demand with fixed supply drives prices up.

Why the others are wrong:

• A: Better copies increase supply of fakes, potentially lowering authentic prices.
• C: Inelastic supply explains why prices can rise but not the cause of increasing demand.
• D: Government policies on merit goods affect public access, not private market prices directly.

Final answer: B