How much for an olympic torch?

I’ve just seen a great piece of topical demand and supply in action today. Just in case you’ve missed it on the news, the Olympic torch arrived in the UK and embarked on a 70-day tour in the run-up to the London 2012 games.

‘Each of the 8,000 torchbearers will run for about 300m with the flame before lighting the next bearer’s torch in a “kiss”.’ One of the early torchbearers must have been an entrepreneur who clearly knew their Economics, as the first Olympic torch appeared on ebay by lunchtime!

At the time of writing the bidding price at just topped £6000 but the auction still had more than 18 hours to go.

Can you draw a demand and supply diagram to illustrate why the price might be so high? How might you then use this diagram to explain what will happen to the market price if more of the torchbearers complete their leg of the journey and decide to put their torches up for sale as well?

NB - a quick edit to this post - by early evening the price of the torch has reached in excess of £150000 and the link to ebay above may have expired, but search for the London 2012 olympic torch and see what prices they are fetching as more and more ‘suppliers’ enter the market.