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New ones Caldari Koln united	Posted - 2008.01.19 10:41:00 - [1] I'w always made a living out of building items\ships ingame. But in the recent time all the prices have falen drasticly and the profit is mostly gone. So i have to ask is there to many builder\industrial characters and to few items to build?
Triath Lon Keepers of Balance Legion of xXDEATHXx	Posted - 2008.01.19 10:43:00 - [2] I think it all depends on where you are selling... but yeah, manufacturing isn't too difficult of a task. ________ Ambassador Extraordinary Plenipotentiary
Moe Sczyzlak Caldari Destructive Influence Band of Brothers	Posted - 2008.01.19 10:47:00 - [3] With more people in game I'd say you need to build more items and make less of a profit per item than you did before. Should still be able to gain isk from manufacturing though.
Jessica Lorelei Minmatar Decimus Corp FOUNDATI0N	Posted - 2008.01.19 10:59:00 - [4] you need to work harder you sweatshop scum ;-P
Davos Breemer	Posted - 2008.01.19 11:01:00 - [5] Basic logic of a free market - sales price always drops to cost. Below cost and it won't be made, above cost and someone will under cut you. Oh, and if you were wondering - capitalism cannot survive in a free market as there's no profit when sales price is at cost.
Shwedagon Paya	Posted - 2008.01.19 11:04:00 - [6] Originally by: New ones I'w always made a living out of building items\ships ingame. But in the recent time all the prices have falen drasticly and the profit is mostly gone. So i have to ask is there to many builder\industrial characters and to few items to build? Start hauling your stuff to supply-starved areas of lowsec or nullsec. A lot more dangerous, but a lot more profitable.
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.19 11:15:00 - [7] Edited by: Cpt Fina on 19/01/2008 11:15:29 Originally by: Davos Breemer Basic logic of a free market - sales price always drops to cost. Below cost and it won't be made, above cost and someone will under cut you. Oh, and if you were wondering - capitalism cannot survive in a free market as there's no profit when sales price is at cost. Indeed, on a free market with perfect conditions the builders marginal revenue will in the end be the same as their marginal cost. This is however not the case in Eve, which should lead us to the conclusion that there are marketimperfektions of some sort which still allows producers to make profit. One could be that that the information about all goods and prices(in all regions) isn't available (or hard to obtain) for everyone.
Tauranon Gallente Federal Navy Academy	Posted - 2008.01.19 12:08:00 - [8] Originally by: Cpt Fina Edited by: Cpt Fina on 19/01/2008 11:15:29 Originally by: Davos Breemer Basic logic of a free market - sales price always drops to cost. Below cost and it won't be made, above cost and someone will under cut you. Oh, and if you were wondering - capitalism cannot survive in a free market as there's no profit when sales price is at cost. Indeed, on a free market with perfect conditions the builders marginal revenue will in the end be the same as their marginal cost. This is however not the case in Eve, which should lead us to the conclusion that there are marketimperfektions of some sort which still allows producers to make profit. One could be that that the information about all goods and prices(in all regions) isn't available (or hard to obtain) for everyone. in a perfect market, prices drop to just below the cost of the manufacturer with the second lowest manufacturing/delivery costs...
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.19 12:29:00 - [9] Originally by: Tauranon Originally by: Cpt Fina Edited by: Cpt Fina on 19/01/2008 11:15:29 Originally by: Davos Breemer Basic logic of a free market - sales price always drops to cost. Below cost and it won't be made, above cost and someone will under cut you. Oh, and if you were wondering - capitalism cannot survive in a free market as there's no profit when sales price is at cost. Indeed, on a free market with perfect conditions the builders marginal revenue will in the end be the same as their marginal cost. This is however not the case in Eve, which should lead us to the conclusion that there are marketimperfektions of some sort which still allows producers to make profit. One could be that that the information about all goods and prices(in all regions) isn't available (or hard to obtain) for everyone. in a perfect market, prices drop to just below the cost of the manufacturer with the second lowest manufacturing/delivery costs... Profit maximization for a manufacturer on a free market with perfect conditions is where the marginal cost equals the marginal revenue. However as long as there is money to be made, new manufacturers will enter the market; driving the price down. The price will stabilize at a level where the manufacturer doesn't gain nor loose money from producing its goods. It's the "break even point"; the manufacturers revenue will cover the fixed and the variable costs only. Now, if that company can produce these products cheaper than other companies then I think we no longer speak of a fully competitive free market where one fundamental criteria is that all the products are supposed to be homogenous. Correct me if IÆm wrong.
000Hunter000 Gallente Magners Marauders VENOM Alliance	Posted - 2008.01.19 12:42:00 - [10] too many people in eve. CCP, let us pay the online shop with Direct Debit!!! Magners is now recruiting, evemail me or Dagazbo ingame.
Andreask14 Alterum - Infinitus - Fabula Dragons Of Oceans	Posted - 2008.01.19 12:57:00 - [11] Wouldnt there also be more demand if there is more people ?
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.19 13:04:00 - [12] What I really think is the problem behind manufacturing in Eve and the reason why I don't try it is the lack of entrybarriers and unique "productionlines". It seems to be very hard to differentiate your product or the cost it takes to produce it in Eve and it's often very easy for anyone to start producing said products. Unless you got a beneficial contract with a resource-supplier there really isn't much stopping anyone to produce the exact same product at the exact same cost as you. Time, to train skills seems to be the biggest barrier, and maybe initially capital. There really should be more to it.
Mark Lucius The Vinlanders SMASH Alliance	Posted - 2008.01.19 13:43:00 - [13] Originally by: Cpt Fina Profit maximization for a manufacturer on a free market with perfect conditions is where the marginal cost equals the marginal revenue. However as long as there is money to be made, new manufacturers will enter the market; driving the price down. The price will stabilize at a level where the manufacturer doesn't gain nor loose money from producing its goods. It's the "break even point"; the manufacturers revenue will cover the fixed and the variable costs only. Now, if that company can produce these products cheaper than other companies then I think we no longer speak of a fully competitive free market where one fundamental criteria is that all the products are supposed to be homogenous. Correct me if IÆm wrong. Assuming stable supply and demand, no innovation and that products never get take out of production. ---
New ones Caldari Koln united	Posted - 2008.01.19 16:38:00 - [14] More pepole shuld meen more profit, but in eve you got about 75% carbears runing missions in empire with almost 0% risk, so they dont loose ships so often. therfore risk\reward wil be bulked
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.19 17:39:00 - [15] Originally by: Mark Lucius Originally by: Cpt Fina Profit maximization for a manufacturer on a free market with perfect conditions is where the marginal cost equals the marginal revenue. However as long as there is money to be made, new manufacturers will enter the market; driving the price down. The price will stabilize at a level where the manufacturer doesn't gain nor loose money from producing its goods. It's the "break even point"; the manufacturers revenue will cover the fixed and the variable costs only. Now, if that company can produce these products cheaper than other companies then I think we no longer speak of a fully competitive free market where one fundamental criteria is that all the products are supposed to be homogenous. Correct me if IÆm wrong. Assuming stable supply and demand, no innovation and that products never get take out of production. That's assumtions you make when looking at a free market with perfect competition. I don't however believe Eve is a market of that character.
Hannobaal Gallente Igneus Auctorita GoonSwarm	Posted - 2008.01.19 17:48:00 - [16] Originally by: Cpt Fina That's assumtions you make when looking at a free market with perfect competition. I don't however believe Eve is a market of that character. On the contrary. Eve's economy is a lot more like that than reality could ever be.
000Hunter000 Gallente Magners Marauders VENOM Alliance	Posted - 2008.01.19 17:52:00 - [17] Originally by: Andreask14 Wouldnt there also be more demand if there is more people ? U'd think so but building stuff is relativly easy so noobs can start building stuff almost from day 1 so more noobs means more production and more items from ratloot so less items bought from market, so prices drop, even with the increase in players. Problem that is hard to solve, could make building T1 items more difficult.. atleast skillwise, but even if u have only a dozen or so manufactures in an area they will compete cuz there are no cartels in eve anymore really (like it used to be with T2 items) CCP, let us pay the online shop with Direct Debit!!! Magners is now recruiting, evemail me or Dagazbo ingame.
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.19 17:56:00 - [18] Originally by: Hannobaal Originally by: Cpt Fina That's assumtions you make when looking at a free market with perfect competition. I don't however believe Eve is a market of that character. On the contrary. Eve's economy is a lot more like that than reality could ever be. Well, the free market with perfectly competitive conditions can't be found (or are very rare) in the real world. It's merely a tool, a theoretical model, one uses for studying a vareity of markets. Eve's market don't live up to the three basic criteria that have to be met to classify it as a perfectly competitive market.
SiJira	Posted - 2008.01.19 21:55:00 - [19] prices havent fallen recently at all - prices were higher for a month or so because of minerals learn to sell in the right places Trashed sig, Shark was here
MotherMoon Huang Yinglong FOUNDATI0N	Posted - 2008.01.19 21:56:00 - [20] in the great wildlands rifters sell for 800k each.
Ishina Fel Caldari Synergy. Imperial Republic Of the North	Posted - 2008.01.19 22:49:00 - [21] Originally by: MotherMoon in the great wildlands rifters sell for 800k each. This. The problem is not too many people producing, the problem is too many /lazy/ people producing. The easiest way to sell something is to put it up for sale in Jita. Therefore an ungodly amount of producers put their goods up for sale in Jita. Whereas just a few jumps away, there may be markets with vast price differences. Take a look at Torrinos, for example, and compare prices to Jita... And that's not even going into lowsec or 0.0 yet! The farther you are willing to haul your goods, and the more danger you are willing to face, the higher your profit margins will be. Be the Ultimate Ninja! Play Billy Vs. SNAKEMAN today!
Spoon Thumb Paladin Imperium	Posted - 2008.01.20 00:34:00 - [22] There is no skill in making stuff, just in selling it for a profit. However, if there was no dropping of T1 loot ever, and only the occasional drop of named or faction items, and CCP let us build named items, then it'd mean that no manufacturer trying to sell his goods ever gets caught by the market failures for many product lines, where price to buy on markets = cost, as the price is pushed up by people competing to get low buy orders either to refine for profit or because they actually need the item, and noob mission runners selling the items and competing with each other to sell as quickly as possible to squeeze the isk from their mission Market failure....yeah I like that word even if i don't use it entirely correctly Khaldari khanidpublic: RP channel for Kingdom loyalists Recruiting
Marine HK4861 Caldari Seoltachd	Posted - 2008.01.20 01:22:00 - [23] Originally by: Cpt Fina The price will stabilize at a level where the manufacturer doesn't gain nor loose money from producing its goods. It's the "break even point"; the manufacturers revenue will cover the fixed and the variable costs only. There's a big assumption in there with regard to EVE. You're assuming that people doing the manufacturing are calculating their costs correctly and not (like many new characters) take the view "if I mine the minerals myself, they're free". The price for any given market item should stabilise around what a character with sufficient refining skills and standing for a perfect refine can melt and sell the minerals for, or at least that's what any savvy industrialist should aim to do.
Valan The Fated Interstellar Alcohol Conglomerate	Posted - 2008.01.20 01:34:00 - [24] Originally by: Marine HK4861 There's a big assumption in there with regard to EVE. You're assuming that people doing the manufacturing are calculating their costs correctly and not (like many new characters) take the view "if I mine the minerals myself, they're free". There are a lot of people today that don't put a value on their time. They think anything they mine, salvage or pick up is free. This is bad for bears but great for PvPers. I can't believe are that dumb tbh. /start sig I love old characters that post 'I've beeen playing the game four years' when I know their account has been sold on. /end sig
Ankanos Caldari School of Applied Knowledge	Posted - 2008.01.20 01:58:00 - [25] location, location, location!! aside from that... in hi-sec, don't be afraid to sell at a higher price. i sell standard T1 items at 50%-200+% above regional average all day long in decent quantities.. example: cap relays, 36k-42k, cap rechargers 38k-45k, invulnerability fields 119k-130k, dmg control 37k-50k, nanofiber 30k. -most all of these have lower priced competition in the same solar system, but in a different station, yet they sell quite well. -all because they're too lazy to jump to another station. never underestimate the laziness of human beings and the power of (in)convenience. -esp for those with plenty of isk. if a guy is doing missions and needs a say, a damage control which usually costs around 7k, he will happily pay 30-40k for one if its in his station. -even if one for 7k is in a station next door. the hassle of undocking/docking/warping/docking/undocking/docking etc, just to save 20k-30k is rarely justified. esp in the case of L3-L4 mission runners. the same applies for ships.. just scale up the margins. as long as you don't post items with insane prices, you can easily set higher than normal prices and get decent profit margins. also, compete with yourself. setup 3 sell orders of the same item in the same station with different prices this will ward off any (lazy) competition looking to setup shop. as well as (esp when your the only seller in the system,) it will give the buyer the illusion that they are getting a good deal when they see they have the ability to get the "lowest price" in the system without having to undock. they will feel more in control of their buying power, thus nudging them even more to ignore a better deal nearby and buy your items instead. lastly, learn the habits, ships and weapons of the locals in the constellation your looking to sell in. knowing your client base will go a long way in learning what items they need most to kill they're neighbors or NPC's most effectively. :) -and don't forget to find out who your potential competition is too. sometimes you can use them to your advantage. there is no reason you cant make a good profit even when your right next to a major trade hub. sure, it may seem like small change, but in volume, it adds up. -works a treat. -ank ---
Ankanos Caldari School of Applied Knowledge	Posted - 2008.01.20 02:09:00 - [26] Edited by: Ankanos on 20/01/2008 02:10:08 PS.. and if your gonna sell ships.. you'll sell more ships as well as mods, plus get repeat buyers if you also stock the station with all the items needed to kit out the ship with the most common pvp/pve setups as well. -this is esp true if you setup shop next to known low sec pirate systems that n00bs die in allot, like Mara for example. try it, it works.. -ank ---
Paulo Damarr	Posted - 2008.01.20 02:17:00 - [27] Originally by: New ones More pepole shuld meen more profit, but in eve you got about 75% carbears runing missions in empire with almost 0% risk, so they dont loose ships so often. therfore risk\reward wil be bulked Lol what is it with some people? if all else fails blame the carebears, why is it every discussion some cave dweller has to lurch onto their keyboards and claim "its da carebears faultses" ----------------------------------------------- My new years resolution is to give up nonconstructive posting
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.20 10:26:00 - [28] Originally by: Marine HK4861 Originally by: Cpt Fina The price will stabilize at a level where the manufacturer doesn't gain nor loose money from producing its goods. It's the "break even point"; the manufacturers revenue will cover the fixed and the variable costs only. There's a big assumption in there with regard to EVE. You're assuming that people doing the manufacturing are calculating their costs correctly and not (like many new characters) take the view "if I mine the minerals myself, they're free". Now, did I make the assumtion that this was the case in Eve. Did I or did I not say that "This is however not the case in Eve"? Maybe I said that this was the case "on a free market with perfect conditions"? Is that possible at all?
Anna Sofia Lagavullin	Posted - 2008.01.20 10:43:00 - [29] Edited by: Anna Sofia on 20/01/2008 10:44:34 Originally by: Cpt Fina Edited by: Cpt Fina on 19/01/2008 18:17:49 Originally by: Hannobaal Originally by: Cpt Fina That's assumtions you make when looking at a free market with perfect competition. I don't however believe Eve is a market of that character. On the contrary. Eve's economy is a lot more like that than reality could ever be. Well, the free market with perfectly competitive conditions can't be found (or are very rare) in the real world. It's merely a tool, a theoretical model, one uses for studying a vareity of markets. Eve's market don't live up to the three basic criteria that have to be met to classify it as a perfectly competitive market. Edit: And please quote me or provide a link to where I said that there are a RL example of a market that are more of a perfect competition-market than Eve. If you can't then remove "on the contrary" since nothing in the quoted segment implies such a thing. well.... not everything has perfect competition, but I'd say that most of the t1 items in the game is "unprofitable" due to the fact that the market structure leads to a perfectky free market -eve's market has low/none entry barriers -there is practically unlimited amount of producers -you can shut down production and your variable costs will be disappear in an instant Dunno what more you're looking for? edit: hangover typos
Helen Sobell Interstellar Capital Systems Consortium Holdings	Posted - 2008.01.20 11:02:00 - [30] you must be making the wrong stuff. i am making anice fat profit just making certain tech 1 goodies.
Aindrias Amarr Labteck Corporation LTD. Libertas Fidelitas	Posted - 2008.01.20 11:15:00 - [31] The reason why people have to buy stuff is because they can't make it themselves. Nowadays everyone has a miner or industrial alt to do their free bidding (it's slavery i tell you! ) so those trying to make a living are competing for a much smaller market of those that don't have an Army of Alts (tm) hence margins fall.
JabJabVVV Reikoku Band of Brothers	Posted - 2008.01.20 11:24:00 - [32] Originally by: Aindrias The reason why people have to buy stuff is because they can't make it themselves. Nowadays everyone has a miner or industrial alt to do their free bidding (it's slavery i tell you! ) so those trying to make a living are competing for a much smaller market of those that don't have an Army of Alts (tm) hence margins fall. Not true; you only have to look at the market data for a few items available in Jita to see that the volume of sales for almost everything has increased dramatically over the last year (with the rising player base I assume). ----------- When I was a n00b, I spake as a n00b, I understood as a n00b, I thought as a n00b: but when I became pr0, I put away n00bish things.
Aindrias Amarr Labteck Corporation LTD. Libertas Fidelitas	Posted - 2008.01.20 11:25:00 - [33] Quote: Not true; you only have to look at the market data for a few items available in Jita to see that the volume of sales for almost everything has increased dramatically over the last year (with the rising player base I assume). I didn't say volume, I said margins ;-) PROFIT MARGINS ;-)
JabJabVVV Reikoku Band of Brothers	Posted - 2008.01.20 11:29:00 - [34] Originally by: Aindrias I didn't say volume, I said margins ;-) PROFIT MARGINS ;-) You also said that the market has shrunk when it has, in fact, grown (not to mention that a smaller market does not mean inherently lower profits). ----------- When I was a n00b, I spake as a n00b, I understood as a n00b, I thought as a n00b: but when I became pr0, I put away n00bish things.
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.20 11:29:00 - [35] Originally by: Anna Sofia Edited by: Anna Sofia on 20/01/2008 10:44:34 Originally by: Cpt Fina Edited by: Cpt Fina on 19/01/2008 18:17:49 Originally by: Hannobaal Originally by: Cpt Fina That's assumtions you make when looking at a free market with perfect competition. I don't however believe Eve is a market of that character. On the contrary. Eve's economy is a lot more like that than reality could ever be. Well, the free market with perfectly competitive conditions can't be found (or are very rare) in the real world. It's merely a tool, a theoretical model, one uses for studying a vareity of markets. Eve's market don't live up to the three basic criteria that have to be met to classify it as a perfectly competitive market. Edit: And please quote me or provide a link to where I said that there are a RL example of a market that are more of a perfect competition-market than Eve. If you can't then remove "on the contrary" since nothing in the quoted segment implies such a thing. well.... not everything has perfect competition, but I'd say that most of the t1 items in the game is "unprofitable" due to the fact that the market structure leads to a perfectky free market -eve's market has low/none entry barriers -there is practically unlimited amount of producers -you can shut down production and your variable costs will be disappear in an instant Dunno what more you're looking for? edit: hangover typos No, not even the T1 market is a perfectly competitive market in the normal meaning... even if it's easy to think so. Price taking - Producers and consumers take the price as given. Since each producer and consumer buy/sell such a small part of the market it will have a microscopic effect on the price. Therefore producers and consumers should take the marketprice as a given, not something they can affect. In Eve there has been numerous examples of people trying to manipulate the marketprice by buying up a large amount and then reselling at a higher price. Now whether this has been successful or not isn't what we're looking at. The price on a certain item in Eve is not given, but can be manipulated. Product Homogeneity - All products should be perfect substitutes to eachother. No company can raise the price of their product without losing all or most of its business. You shouldn't be able to differentiate a product from your competitors. Neither product attributes nor services that comes with the product. In real life there are very few products that are truly homogenous eg you can differentiate your wheat by organic farming thus you can sell it for a higher price. The products on the traditional regional eve-market are homogenous but you also have a more private market where you can provide services along with the products. Such as an exclusive, reliable and continous cap-production maybe in combination with a NAP. Or the offer to haul products to the buyer. Free entry and exit - Buyers can easily switch from one supplier to another and producers can easily enter or exit a market. Yes, you have very low obvious entrybarriers on the T1-market in Eve but there are some that aren't as obvious. While skilltraining is one of the smallest entrybarriers the source of resources (and maybe productionslots) are harder to overcome. An organized, skilled producer with special agreements with resource-suppliers will be a pretty effective barrier when he can produce the modules cheaper than the newcomers. Even though these three assumptions doesnÆt hold for the Eve market it is still a very competitive one and obviously more so than many RL ones. Can one apply the tools for a perfect competitive market on Eve or not? IÆm not sure. What I am pretty certain of though is that the Eve market doesnÆt meet all the criteria of being a perfectly competitive market to a full extent.
Ris Dnalor Minmatar Ama-gi	Posted - 2008.01.20 11:37:00 - [36] i of late have found that i can purchase many items in hi security space for less than the material cost to build them. I attribute this to the fact that building things is too easy and peoples characters can start building things long before the players are really ready. They think that minerals and components are 'free' because they mined them or otherwise acquired them themselves rather than purchasing them. The fact is I see many ppl building and selling things at prices so low that they could've just sold the components on the open market and made more isk with less work. This does, however, mean that I can run to hi sec, buy up a load of items, take them to a low sec area where the market is underdeveloped and sell it all for 2 to 3 times what i paid for it. If you can no longer build & sell for profit b/c people are selling to cheap, then adapt and wait for them to go broke, and in the mean time, profit from their lunacy. tralala -- No love for the Matari
Aindrias Amarr Labteck Corporation LTD. Libertas Fidelitas	Posted - 2008.01.20 11:40:00 - [37] Originally by: JabJabVVV Originally by: Aindrias I didn't say volume, I said margins ;-) PROFIT MARGINS ;-) You also said that the market has shrunk when it has, in fact, grown (not to mention that a smaller market does not mean inherently lower profits). If we had Companies in the tradition sense, you would correct. Since however we don't pay wages to our alts and we have 3 - 5 toons working to supply 1 with ISK. That guy isn't going to "go out of business" if he only makes 5mill instead of 10mill on the BC because his alts aren't going to whine about their wages. They will price cut until they are blue in the face to compete with "that guy over there". The consumer loves it and buys more (that's the volume increase). More subscriptions does not mean more "players", many of them could be alts who do not circulate ISK in any direct way for any amount worth while. Standard Economics does NOT work here.
Hellspawn666 Minmatar Master Miners	Posted - 2008.01.20 14:00:00 - [38] Isk can still be made producing things since its all about location, plus 0.0 markets still carry a very nice profit and easy enough to fill up with a freightor or mom. However often i would admit that your making the isk trading rather then building since you could of brought the item for a simular price elsewhere. But the rule still stands people will pay a few extra mil not to travel for it and certainly a couple hundred K.
Janu Hull Caldari Terra Incognita Dark Matter Coalition	Posted - 2008.01.20 14:42:00 - [39] Given the complexity of the system, it would be nice if there were some way of allowing crafter skill to enter into the final item quality. Standard output crafting systems inevitably reach this point. Even if it were a random chance to turn a certain percentage of output items as their "named" supergrade types, it would be a start to giving crafters the ability to differentiate themselves from each other.
Kazuo Ishiguro House of Marbles Zzz	Posted - 2008.01.20 14:51:00 - [40] There are still plenty of modules where there isn't so much competition. There's at least 1 item of which I'm currently the only supplier. My research services Spreadsheets: Top speed calculation - Halo Implant stats
Marine HK4861 Caldari Seoltachd	Posted - 2008.01.21 00:10:00 - [41] Originally by: Cpt Fina Now, did I make the assumtion that this was the case in Eve. Did I or did I not say that "This is however not the case in Eve"? Maybe I said that this was the case "on a free market with perfect conditions"? Is that possible at all? My apologies, I've only just managed to read the rest of the thread. You've stated that a free market with perfect conditions will result in the price dropping to the manufacturer's cost price and that this is a theoretical model. Please correct me if I'm wrong, but I can't think of a single real life example where the market is even close to this model, due to some form of government interference (raising the import tariffs to stop cheap overseas goods flooding your market and putting all your own producers out of business for example). Given that EVE has no such outside influences (barring station owners who raise sales taxes in their outposts), wouldn't the EVE market be far closer to this theoretical model than the real world market?
Space Jim	Posted - 2008.01.21 22:03:00 - [42] Quote: This (and similar reasoning) is fine logic for a trader but not for a producer. If you cannot sell the item you produce for more than the lowest commonly available price then the item is not profitable. If I can make rifters (for example) for 150k and sell (or buy) them in Jita for 100k and sell them in Torrinos for 800k then the item is profitable to trade but not profitable to produce. Producing is not the same as trading. Very few items now make decent reliable profits; most items from T1 ammo all the way up to HAC's are now poorly profitable at best to produce (even if they are profitable to trade). I think one of the main reasons that has only been lightly touched on so far is the speed with which producers can react to changing markets. I can start or stop production of almost any item within 24 hours, this puts the minimum loss for a poor/unlucky producer to 1 run of the item and makes for almost instant reaction time. If factories had scaling costs for the amount of items you wished to produce then I think production would be more interesting. ie. if you want to produce 1 rifter it costs you 50k in factory costs (ie adds up to 50% to production cost) but if you want to produce 1000 then it costs 5k per rifter. This would: increase differentiation in production costs based on your bravery; increase risk; generally make the market more interesting (I think) and would more accurately reflect the real world (one of jobs cost more) though this last point is, of course, not too important as Eve is not the real world. I think this is a really good idea, even if the amount of mats saved was nearer a 5% discount for max runs compared to 1 run, It would add a new deimsenision for bulk producers to make better margins and make T1 industry more fun and to make the market better.
Cpt Fina Mutually Assured Distraction	Posted - 2008.01.21 22:52:00 - [43] Edited by: Cpt Fina on 21/01/2008 22:53:11 Originally by: Marine HK4861 My apologies, I've only just managed to read the rest of the thread. No problem. Originally by: Marine HK4861 You've stated that a free market with perfect conditions will result in the price dropping to the manufacturer's cost price and that this is a theoretical model. Please correct me if I'm wrong, but I can't think of a single real life example where the market is even close to this model, due to some form of government interference (raising the import tariffs to stop cheap overseas goods flooding your market and putting all your own producers out of business for example). Indeed, as I wrote earlier in this thread such "perfect competition"-markets are hard (some claim impossible) to find in the real world. The commodities-market (like wheat and copper) comes pretty close though. The perfect competition-model are however vital as a model when using allot of economic tools. Originally by: Marine HK4861 Given that EVE has no such outside influences (barring station owners who raise sales taxes in their outposts), wouldn't the EVE market be far closer to this theoretical model than the real world market? Tax is usually a supplement for a market imperfection, which in turn creates an excess burden. And as far as I know itÆs more of a sign of that a market is less ôfreeö/ more regulated than a sign of it being non-competitive. But just like you say, Eve is a good example of a market that is very competitive. That said, I highly doubt itÆs a perfectly competitive market. The question is who well you can apply the model of ôperfect competitionö on the Eve market.

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