Nahkep Narmelion
Gallente
Center for Advanced Studies
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Posted - 2009.11.24 04:55:00 -
[1]
 Quote:
Don't factor in BPO costs. They are sunk costs and you can recoup any BPO cost by selling it on the market or on contracts if you "went out of business" so to speak.
Yes and no. No, BPO's are not sunk costs. You can recover the isk you spent by reselling the BPO at any time. As such, this makes BPO's a fixed cost. However, the poster above is correct in that neither fixed costs or sunk costs are used in setting the price--only variable costs.
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Nahkep Narmelion
Gallente
Center for Advanced Studies
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Posted - 2009.11.24 14:47:00 -
[2]
Edited by: Nahkep Narmelion on 24/11/2009 14:54:59
Quote:
Yep, we can't have a fake and over-supported market in a game full of spaceships shooting lasers at each other now could we? This is a game and the lower cap on mineral costs from insurance stops markets collapsing to zero price and destroying the game. This isn't the real world, different rules apply, get over it.
Quite correct. The BS insurance provides a soft price floor for minerals. It insures that there is at least some isk to be made by mining. This in turns keeps the market going. If it were removed then the lower bound price on minerals would be zero.
Contrary to some posts I've seen on these forums the major problem with the Eve economy is not inflation, but exactly the opposite--deflation. Prices generally trend down over time, not up. Look at each new ship as it is introduced. I make T2 items and the price there has also been trending down.
Quote:
Except, since you were coming back empty anyways you are making a profit as your opportunity costs are zero. You would have taken that JF to 0.0 anyways, so the opportunity costs involved are those related to the jump freighter trip, not hauling the trit back.
No. The opportunity cost is the next best option he has for the trit. So if he builds BSs then the next best option is to sell it directly for 4.0/unit. If he sells it, it is using in module/ship construction. The jump freighter costs are sunk costs and totally irrelevant since he cannot recover the cost (the fuel is used and gone--hence unrecoverable).
Seriously, sunk costs are just that sunk...gone. Ignore them. Simple example, you plan a vacation and the hotel has a $100 non-refundable deposit. The day you are to leave you feel sick and really just want to stay home. Now do you still go because you'll lose that $100 or stay home? You stay home because the depost was lost to begin with, it is non-refundable and hence sunk.
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