The Economic Situation As I See It
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by wozzup1223
So, for my first article I'm going for a big ol' complain.
First, some statistics.
Today, the Iron price dropped to 0.13 AUD. Now, according to outrageous inflation, and reletively high wages, this is not a sustainable price. price should be aproximatly 0.18 AUD. Now, why has the price dropped so dramatically?
Because, there has been a massive influx of new companies, and people are working in them for free. This means that iron is essentially being made for free (ignoring the price of 10 wellness). Now, as this iron is free, any thing sold is a huge profit.
However, my question to you is, why sell for less than the market price? Why lower your potential profits. There is enough of a market in iron that if people are happy to wait for even a short time, it WILL sell at market price. This means more profit.
In simple terms: Price of 250 iron at 0.13= 32.5AUD. Price of the same amount at realistic market price of 0.18= 45 AUD. That is actually a BIG difference. While the iron is free, this is not maximising profits.
Now, if we have a company full of people who produce 250 iron every work, and pay them 32AUD, the following happens: you gain 12.5AUD per person in your company, or a total of about 1 gold a day. Better than 32.5AUD no?
So essentially, here is what I am getting at. We need to be REASONABLE about prices. You will make more money if you are willing to take the time to run the company properly. DON'T undercut prices. Your resources will sell at market price, and you will make MORE money. This is not an attempt at price regulation. It is an attempt to maximise everyone's profits and help out the economy.
Thanks for reading my article,
Wozzup1223
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Comments
the current price IS the market price.
By market price I mean TRUE market price. that is; the level at which the price should be according to all market indicators. Pay is rising, the dollar is becoming worth less, and yet the price lowers. Is stupid.
freeeakin newbzzz
I believe you mean;
"Goodness, the effect that the newer members of society can have if they are not educated"
Balmain, your in no postion to call anyone noobs :')
oh economics, how it screws us all...
economics is a pseudo-science
its a free market. an old player working for his own iron company produces much more than a young (simple)! he has the right to sell at whatever price he likes (again simple). there's no way to stop someone selling at lower prices, if he can afford to do so.
Problem is there is much more supply now that anyone can start a RM company with 10 gold and work in it for 5.55 a day (5Q1 breads at 1.11). Maybe the government should take advantage of the falling prices and increase the taxes. This would raise prices somewhat and give the country a little spending cash.
Well said Bobby but many who own RM aren't stupid, they also own Manufacturing co's aswell, so market price is irrelivent as you supply yourself, because of this fact that's why prices are falling as there is no demand for raw on a large scale. Well done Wozzup on your 1st article mate 😉
Nice article mate, the main problem is that when newer players start companies they rarely know what they are doing, as a result they dont have large reserves of capital to allow them to withstand a few days without sales.
Their only option is to cut their prices to get a return on their product and it gives them the false impression that they are running a successful company when in reality they are losing money. The market will correct itself, it goes in cycles.
May not be regulation but it sure sounds like collusion. Maybe you havent heard of the concept of free markets and in particular the superior efficiency of supply and demand.
Venja, it is neither of those things. collusion would be the informed decision between multiple companies to sell higher in order to manipulate market trends. this is merely a call for people to be sensible and sell at sustainable prices.
Also, i am not decieving people, and thus cannot be accused of collusion.
I think a big reason is because the price of making a company has dropped from 20gold to 10gold after this new 'my land' idea, so more people are creating companies.