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PostPosted: Mon Apr 25, 2005 16:54    Post subject: Market Prices Reply with quote

Some things in this universe i dont think i will *ever* understand. Like, for example, the market prices that imperators sell components for.

Correct me if i am wrong, but the production cost of making an item, lets say, a Crystal Transformer (E2), can be calculated as follows;

If a factory upkeep costs 100 credits * level * level, and production is level * level units

Therefore, each unit of production costs 100 credits. (assuming you keep the factories fully busy all the time - wastage costs extra)

Construction of an item costs one unit per level.

Therefore, cost of production = 100 credits per level of component, plus the cost of the raw materials (mining or purchase).

So, our E2 (level 2) requires two units at 100 creds each, plus materials. This (obviously) equates to 200 creds, plus the cost of the energium, optium and titanium.

I look at the market price and it is at 130. An E1 sells for just 45!

Am i mis-understanding something or is the universe just a weird and wonderful place?
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PostPosted: Mon Apr 25, 2005 16:56    Post subject: Reply with quote

"Kosmor Trade
Purchase and sales orders, commercial agreements and market specific talk"

P.S. I post here rather than Talk or Q&A because of 'market specific talk'
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Joined: 15 Feb 2004
Posts: 827
Location: UK

PostPosted: Mon Apr 25, 2005 18:08    Post subject: Reply with quote

i know Wink

maybe some people just want to sell something... even if they get little money for it?

of course for pros, the costs drop, but even still it is not as low as that
Major alphabravo in the house Thalgados-Sissyhood
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PostPosted: Tue Apr 26, 2005 04:54    Post subject: Reply with quote

My politics dept. suggest that it may be that imperators dont mind selling things at a loss!

They tell me that some governments actually *subsisdise* industry, and run at a loss, just so that their people have jobs!

Socialist i think they called it. I never did understand those politics guys...

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PostPosted: Tue Apr 26, 2005 06:16    Post subject: Reply with quote

could be multiple reasons for such a low price... arangemant between houses, extra ship parts,...
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PostPosted: Tue Apr 26, 2005 13:43    Post subject: Reply with quote

Dear fellow imperators;

If we calculate all raw materials to 10 c/unit, and factory capacity at 100 c/level, my advisor on industrial economics (ie: spreadsheet) informs me that one e2 have a production cost of 270 c. (And one T6 at 9.240 c)

However, he insists on having the factories running to avoid wasting factory capacity. "Why ever would we spend houndreds of thousands on factory upkeep if we don't use them? What fool would want to throw money out of the window?"

My advisor on mercantile economics, however, informs me that there is a hefty overproduction when it comes to supplies, which leads to dumping. "Why do we even own factories in this situation? After all - we can buy the supplies alot cheaper at the market!"

Only when my advisor on mercantile affairs enters the discussion ("You should also account for the volatility of the market. You may ask, but you are not guaranteed to be given!"), the other two agrees to nuance their stances. "Economics is a complex matter, and there is more to it than what first meets the eye", the advisor on mercantile economics concludes. The other two nodds their heads, and in just a short while sums up four of the main issues;

    1 - Most imperators develop planets with a lot higher productivity than the basic 10. With a productivity of 15, the raw materials would cost 6,67 c/unit, and an e2 would cost 247 c (not 270 c as in the previous example).

    2 - Also, from an economists point of view, there is a difference between fixed and variable costs. In the main example, 200 c is for the factories and 70 for the raw materials. You should at least cover the expences for the raw materials (sell for 70 c or more). The upkeep of the factories runs anyway, and if you can cover at least a fraction of this expence, then it is better than not covering anything at all. From this point of view, selling an e2 at 71 c/unit makes perfect sence - in the short run. If the price will be permanently this low, then you should not produce any more e2's.

    3 - Imperators with a Pro-account can create sertain buildings increasing the capacity of their mines and factories with 30% without altering the upkeep. This way, the raw materials from a mine with a productivity of 10 will only cost 7,7 ( 100/(10*1,3)=7,7 instead of 100/10=10), and the factory will cost 77 c/level instead of 100. Then the e2 will cost 208 c to produce ( 154 c for the factory upkeep pluss 54 c for the raw materials). If you have an average productivity above 10, then you can produce even cheaper.

    4 - As the market is notoriously unstable, you have to sell cheap to be guaranteed a sale. In other words: it is expensive to get hold of credits fast.

The free market relies on the assumption of perfect information (you knowing my costs and vice versa). On our market there is rather a "perfect lack" of information - noone knows, nor do they seem to be able to make qualified guesses.
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PostPosted: Tue Apr 26, 2005 13:45    Post subject: Reply with quote

And one last thing:
MIHAc might have a point in pointing at "arangemant between houses".

Because the market is so unstable, I myself prefer to do in-house trading. I can agree on a trade, and use the star trade to execute the trade. I am guaranteed delivery, at a price I am confortable with and I know who gets the goods. This keeps trade off the official market, however, and might help keep the market destabiliced (in other words: we might be in a vicious sircle here).

I would suggest to allow the possibility to make standing orders on the market. For example, one such order might be to buy 1000 units of e2 at 200 c/unit every turn (if I produce it for 208 as in point 3 above), or to sell 250 e2 at 210 c/unit...

This would stabilise both the markets supply and its prices...
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PostPosted: Tue Apr 26, 2005 14:58    Post subject: Reply with quote

I am getting carried away here...
(the interest is because I am an RL economist: macro is fun!)

But; If we assume that most players are non-Pro, then factories have an upkeep of 100 credits pr level. We will also assume that noone will build mines if the productivity is less than 10, resulting in raw materials costing 10 credits pr unit (or less). The prices we then calculates are the MAX prices that you should find at the market, allowing even the most uncareful non-pro imperator to make a nice profit:

    m1 - 170 c
    m2 - 330 c
    m3 - 500 c
    m4 - 760 c
    m5 - 1 100 c
    m6 - 1 570 c
    m7 - 2 180 c
    m8 - 3 110 c

    Optium processing:
    o1 - 130 c
    o2 - 260 c
    o3 - 420 c
    o4 - 630 c
    o5 - 960 c
    o6 - 1 440 c
    o7 - 2 250 c
    o8 - 3 620 c

    Titanium processing:
    t1 - 130 c
    t2 - 270 c
    t3 - 420 c
    t4 - 630 c
    t5 - 970 c
    t6 - 1 400 c
    t7 - 2 180 c
    t8 - 3 710 c

    Energy cells:
    e1 - 120 c
    e2 - 270 c
    e3 - 440 c
    e4 - 660 c
    e5 - 1 060 c
    e6 - 1 480 c
    e7 - 2 180 c
    e8 - 3 500 c

    Plasma processing:
    p1 - 140 c
    p2 - 280 c
    p3 - 440 c
    p4 - 640 c
    p5 - 1 010 c
    p6 - 1 420 c
    p7 - 2 160 c
    p8 - 3 620 c

If you use these prices to calculate the cost of components, you would get:

    H1 - 3 450
    H2 - 7 750
    H3 - 13 000
    H4 - 22 800
    H5 - 34 300
    H6 - 62 500
    H7 - 116 350
    H8 - 206 850
    H9 - 371 301
    H10 - 689 000
    H11 - 1 556 150

    D1 - 1 460
    D2 - 2 640
    D3 - 4 180
    D4 - 5 490
    D5 - 9 380
    D6 - 12 620
    D7 - 13 940
    D8 - 19 220
    D9 - 29 000
    D10 - 40 880
    D11 - 52 360
    D12 - 71 240

    L1 - 1 160
    L2 - 1 860
    L3 - 3 240
    L4 - 4 955
    L5 - 6 570
    L6 - 9 040
    L7 - 12 770
    L8 - 17 020
    L9 - 23 540
    L10 - 30 500
    L11 - 40 780
    L12 - 55 700

    T1 - 1 495
    T2 - 2 270
    T3 - 3 630
    T4 - 4 830
    T5 - 6 820
    T6 - 9 240
    T7 - 13 070
    T8 - 15 850
    T9 - 22 490
    T10 - 28 300
    T11 - 35 580
    T12 - 45 650

    S1 - 3 650
    S2 - 6 890
    S3 - 11 390
    S4 - 16 950
    S5 - 19 530
    S6 - 31 120
    S7 - 40 460
    S8 - 54 360
    S9 - 74 080
    S10 - 98 120
    S11 - 133 930
    S12 - 184 620

No prices should be above this, as even all non-pro's can produce much cheaper than this. Wink
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PostPosted: Wed Apr 27, 2005 10:09    Post subject: Reply with quote

noone will build mines if the productivity is less than 10, resulting in raw materials costing 10 credits pr unit (or less).

I build plasma & titanium at as low as 6 productivity, since break-even for them is usually no higher than 5, sometimes as low as 2.
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PostPosted: Thu Apr 28, 2005 04:11    Post subject: Reply with quote

Yes, I do that too. There's a chronic shortage of those two raw materials. Sad

But in economic terms, this will increase the average cost, reducing your competitive ability. On the other hand - I don't expect the prices to drop anytime soon...
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PostPosted: Thu Apr 28, 2005 04:51    Post subject: Reply with quote

i mine those elements at low values also, but with ore refinerery and the market price, it is well worth doing so.

Even with the more common elements, it is worth mining at 7 or 8 as it still works out cheaper than the marketplace.
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PostPosted: Thu Apr 28, 2005 15:21    Post subject: Reply with quote

Hmmm, well, I have a planet w/ 15 titanium production =P And another w/ 9 plasma production, so that helps. Need a good source of optium though....oh well
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PostPosted: Fri Apr 29, 2005 12:45    Post subject: Reply with quote

I got a good source of both optium and energium, but only a scarce supply of titanium and plasma.

And the market prices are directely forbidding! Sad
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PostPosted: Fri Apr 29, 2005 13:08    Post subject: Reply with quote

I will sell low for u my friend
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PostPosted: Fri Apr 29, 2005 13:09    Post subject: Reply with quote

he he...i have size 3 with....21...titanium productio....
3 with .....15....optium production
1 with .......15 ...plasma production
if i was pro xyfus would have 27-8 titanium production
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