The Catalyst

The Catalyst ✯ Day 673 of the New World
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= -=-

Welcome to The Catalyst's first article of the series "Economics Explained" Today, we will be talking about prices in Erepublik and how they change as the quality increases. At the end of this, I hope you have learned something!

Let's take a look at our first graph:

As you might have noticed, this graph is nonlinear, or in other words, is not a straight line up. In our next graph, you may notice the same, nonlinear trend.


This graph, also shows that there is not a constant rate of change, or in other words, from Quality to Quality, the change differs.

Let's see if we can figure out why this nonlinear trend occurs.

In this graph, you can see how the start-up costs are also nonlinear. If you compare this graph to the first graph I showed you, you'll see how the trend is almost the same.

Now, if you think about this, it makes sense, if your gonna pay much more for a Q5 Food Company then you will want to get your money's worth and the prices will rise in a larger ratio than from any other quality company.

You can also see the same trend in the differences in cost to start-up a company to the differences in the cost of the product (Graph 2).


To wrap this up, let's see how supply and demand fits into this scheme. As a Quality 5 company costs a lot more to start up, there are naturally less of them. Because there are less of them, they can charge more for their products because not as many people are producing them.

Hopefully today you have learned from these graphs and my explanation of why the prices to not rise proportionately.

John C,
✯ The Catalyst ✯