Semkhet
The Priory
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Posted - 2006.08.24 07:46:00 -
[1]
 Originally by: Durethia
Low demand does not mean low prices. High demand does not mean high prices either.
It's actually the other way round in most real world cases. The only way, high demand can result to higher prices is if there isn't sufficient competition, which without competition capitalism can not exist. If a product is in high demand, and there is competition (capitalism), then prices will gravitate lower due to forces within competition. Often, if demand is low, the prices are higher regardless of competition. If demand is low, then collusion is easier, and a product becomes niche. Lamborghini's demand is very very low, never brought down their prices.
But the real irony is, socialists and communists understand more of what Adam Smith asserts than those who are fans* of Capitalism.
*my use of fans here indicates a blind trend. Any "ism" you choose, and for any person who claims they condone that "ism", you'll find that most have absolutely no clue how to defend their stance, in any personified way but instead simply regurgitate canned propoganda supporting that ideology fed by those in power, who in their best interests hope their citizens adhere too. Ask the average American something about capitalism, and you'll get a blank stare and a mono-tone spew of something he might have read somewhere, as for whether he believes it? It's far easier to just accept it, becuase those around him seem to do the same.
Nice theories. But I'am afraid you don't have enough money to know what you are talking about in RL practice...
Market conditions for a given product at a given time only adopt one of three profiles: overproduction, equilibrium, shortage. Any of these profiles is function of the relation between production's theorical maximum capacity + producer's potential benefits (read interest in producing) vs market absorption capacity.
Since there are way more players able to fly HAC's than CS, your potential HAC customer base is bigger, what in turn maintains HAC prices high since there are more customers than HAC's (specially with vaga's, zealots, ishtars and deimos'es).
The attitude of producers will vary in function of their production ability. A guy who already produces Zealots will probably not go through the hassle of producing Absolutions since he gets a faster benefit & money return with Zealots. Inversely, a guy who owns only an Absolution BPO will produce them as long he can generate a profit since it doesen't enjoy a differenciated line of business.
The attitude of customers will vary in function of their own perception about what a given product gives them back in return for their spent money. It is an highly subjective matter. Taking again Zealots as example, despite the fact that it is the easiest HAC to jam it's still one of the most succefull products.
Ultimately, money is made either in mass distribution of very cheap goods, or by marketing luxury goods. The % profit margin on a frozen pizza is higher than what you can make on Dom Perignon champagne. But you will have to sell 50 pizza's to get the same profit in $ versus a single bottle of Perignon.
That's where localisation of markets come into play, and here we have the main objective difference between RL markets and EVE's economy: since in EVE taxes are consistent through the whole universe, there is no induction on the creation of nodes of wealthy players in precise locations.
In RL you sell froozen pizza's in low and middle income neighborhoods and you sell Perignon in Marbella, Liechstein or Monaco. You can't really do that in EVE...
This brings me to your completely incorrect assessment of Lamborghinis. Would you live in a place where luxury cars are in high demand, you would know that often the yearly allocated quota of newly produced cars to retailers is exhausted in a few months. Thats why for ex. often second hand Ferraris are more expensive than brand new ones: there's no waiting list...
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