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10-23-2009   2 links from elsewhere to this Post. Click to view. #21 (permalink)
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"This creates a higher DEMAND in random box keys. If demand increases, the supply will decrease due to too many people buying keys at 25g."

i made some graphs
correct me if i'm wrong

MR = Marginal Revenue (Price)
Q = Quantity
MC = Marginal Cost
S = Supply
D = Demand
ATC = Average Total Cost

The Market for Random Keys in Long-Run Equilibrium:


Demand Increases due to a New Character Released
Yellow Rectangle = Total Profit


what's interesting at this point is that you said this:
"The basic rule for equilibrium price/quantity is that: if the price or quantity changes, and does not meet the equilibrium requirements, they will naturally change to meet equilibrium."
yet you say that supply DECREASES
as you can see from the last graph, price (MR) increased
giving incentive for new sellers to enter the market

which brings the price back down to the long-run equilibrium price

if i am actually wrong about this, i would like to know
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10-23-2009   #22 (permalink)
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I TOO have made a graph, hopefully to confuse you.



I have graphed the long term effects of random keys on the post-postular effect of a player-run economy in a controlled environment i.e. the coorelation of Lunia economics to the Llama population and the results I have found are startling.

At the beginning of every fiscal year the margin profit reaches equilibrium with the llamas and the second line (indicated by the color green) shows the gradual increase of Random Box Key prices in a post-release post-9/11 Asuka economy.
 
10-23-2009   #23 (permalink)
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Quote:
Originally Posted by Griever
I TOO have made a graph, hopefully to confuse you.



I have graphed the long term effects of random keys on the post-postular effect of a player-run economy in a controlled environment i.e. the coorelation of Lunia economics to the Llama population and the results I have found are startling.

At the beginning of every fiscal year the margin profit reaches equilibrium with the llamas and the second line (indicated by the color green) shows the gradual increase of Random Box Key prices in a post-release post-9/11 Asuka economy.
that didn't confuse me, cuz i actually understand that you're just trolling

i care about the lunia community, so i don't want them to learn incorrect/misleading info
the author of this guide asked me to point out some parts i thought needed work, and i did that
and if i am incorrect myself, then someone should correct me

you, however, are not contributing to this thread at all

EDIT:
btw, my last post was meant for the writer of the guide, not you
he's a business major, so i assume he understands the graphs
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Last edited by WhatThePhuc; 10-23-2009 at 03:38 PM.
 
10-23-2009   #24 (permalink)
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Interesting Graphs Phuc, not so much confusing, as just lacking a minor detail.
It would have been nice to have what the letters meant, for those of us less educated in the subject it's difficult to understand what they represent.
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10-23-2009   #25 (permalink)
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ok i added a legend
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10-23-2009   #26 (permalink)
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MR is marginal revenue (amount of profit that can be gained by selling 1 extra unit)
MC is marginal cost (cost of selling 1 extra unit)
ATC is average total cost
He implicitly made the y-axis "Price"
S is supply
D is demand
Q is quantity

I don't think the first set of graphs shows anything not covered by the second set. Even in the second set, only the second graph is needed to make the point. So I'll just explain the second graph.

The positively-sloped graph is supply. Positively sloped = as price goes up, quantity produced goes up.
The negatively-sloped graph is demand. Negatively sloped = as price goes up, quantity bought goes down.
Where the two lines meet is the market equilibrium --> the most people benefit from that specific price and quantity produced/bought. The price will not budge unless something changes in the buyers or sellers.

When a new character comes out, people want keys for CS. This increases demand, so the demand line moves along the positive x-axis (because x-axis represents quantity).

Look at the new point where the two lines meet: it moves up (positive y-axis, and y-axis represents price) and to the right (positive x-axis, x is quantity).
That means amount produced/bought increases, and price increases.

That's all .-.

Spoiler for fun and profit
Spoiler!
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Last edited by sentythee; 10-23-2009 at 05:43 PM.
 
10-23-2009   #27 (permalink)
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Quote:
Originally Posted by sentythee
Phuc's third set is actually incorrect. If the only reason for the increase in supply is the increase in price, then the new sellers will flee the market just as quickly as they entered when the price goes back down. This would cause the price to increase again, which means the new low price was never an equilibrium.
when the new sellers enter, the price goes back down to long run equilibrium
which is what the 3rd graph is showing
if what u suggest happens (supply decreases, causing price to increase again)
new sellers enter the market again, bringing the price to back to long-run equilibrium

if you'd like to see some links explaining this concept, just say so
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Last edited by WhatThePhuc; 10-23-2009 at 05:51 PM.
 
10-23-2009   #28 (permalink)
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If they keep going up and down, then they're not equilibria, since an equilibrium is stable by definition.
I would like to see the links tho.
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Last edited by sentythee; 10-23-2009 at 06:15 PM.
 
10-23-2009   #29 (permalink)
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here's one:
long run price and output under perfect competition

contrary to what you think, in long run equilibrium, there's no incentive for sellers to leave or enter
because they're earning normal profits
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10-23-2009   #30 (permalink)
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Quote:
Originally Posted by WhatThePhuc
here's one:
long run price and output under perfect competition

contrary to what you think, in long run equilibrium, there's no incentive for sellers to leave or enter
because they're earning normal profits
What this article is claiming would only work under perfect competition (which it says in the title). Because of this, it makes an assumption that doesn't work here (people will continue supplying as long as it's profitable).

It's also pretending that there's only one market, and so people that enter don't leave as long as they make a profit. The problem with this assumption is that people will continue to produce even when there's a more profitable market.

This would obviously drive the prices back down because, as your second chart also predicts, the number of suppliers goes up, and all of these suppliers are willing to sell at the bare minimum price, just as the suppliers before the demand increase.

Spoiler!


If economics did work as your last graph says, increase in demand --> increase in price --> increase in suppliers --> decrease in price, then every increase in demand would lead to a constant price and an increase in quantity exchanged.

Following the same idea for a decrease in demand:
Decrease in demand --> decrease in price --> decrease in suppliers --> increase in price, then every decrease in demand would lead to a constant price and a decrease in quantity exchanged.

From the above two, it follows that price is constant regardless of any change in demand, which is just false.
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Last edited by sentythee; 10-23-2009 at 07:02 PM.
 
10-23-2009   #31 (permalink)
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so you're saying the market for random keys is not perfectly competitive?

the demand curve shifts because the buyers who are already in the market...
are willing to pay more for the same product

let's say...Bob is willing to pay 5g for a random key in long run equilibrium
Asuka gets released; Bob's willingness to pay increases
he's now willing to pay 10g for a random key cuz he wants equips for his Asuka ASAP
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10-23-2009   #32 (permalink)
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No market is perfectly competitive >>
It's valid to use perfect competition as an assumption for theories, but only when the theories actually make sense in the context they're being applied to.

You probably didn't see this because I added it to my last post right before you posted.
Quote:
If economics did work as your last graph says, increase in demand --> increase in price --> increase in suppliers --> decrease in price, then every increase in demand would lead to a constant price and an increase in quantity exchanged.

Following the same idea for a decrease in demand:
Decrease in demand --> decrease in price --> decrease in suppliers --> increase in price, then every decrease in demand would lead to a constant price and a decrease in quantity exchanged.

From the above two, it follows that price is constant regardless of any change in demand, which is just false.
I'm assuming that the final price is equal to the initial price, as your graph shows.
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10-23-2009   #33 (permalink)
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can you give an example of how price does not go back to long run equilibrium
for a market of an item in lunia? (such as random keys)
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10-23-2009   #34 (permalink)
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I haven't been on much in the past few months, so I'm limited in the examples I can give, but...

Well, the obvious example would be to compare the same item from before Rogers to after Rogers. You might say that this only happens because of the increase in the amount of circulating gold, but this only affects the price when people are willing to pay more for the same items (when demand increases).

If you don't like inflation examples, dimlies were sitting at 2g each for an extremely long time (CB to mid TFT?). Right now, I believe they're 1-1.5g each.
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10-23-2009   #35 (permalink)
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Quote:
Originally Posted by sentythee
I haven't been on much in the past few months, so I'm limited in the examples I can give, but...

Well, the obvious example would be to compare the same item from before Rogers to after Rogers. You might say that this only happens because of the increase in the amount of circulating gold, but this only affects the price when people are willing to pay more for the same items (when demand increases).

If you don't like inflation examples, dimlies were sitting at 2g each for an extremely long time (CB to mid TFT?). Right now, I believe they're 1-1.5g each.
Well... dimlies were sitting at 4g in OB, and right now it sits at around 1g.

Atm, some equips come automatically dimlied and/or forted, so that changes the demands as well.
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Last edited by Gladiat; 10-23-2009 at 08:30 PM.
 
10-23-2009   #36 (permalink)
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hhmmmm...maybe there's too many factors
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10-23-2009   #37 (permalink)
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dimlies went down b/c shining powder craft took out other mats
 
10-24-2009   #38 (permalink)
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Quote:
Originally Posted by silklash
dimlies went down b/c shining powder craft took out other mats
^went down cause dailys gave dimlies also
after rb.. it went down cause myth gives like a thousand shining powders

and another factor..
prices can't drop past a certain point... if there's no profit gained its not worth selling so they'll keep it at that price
i.e. if dimlies dropped to 20s each.. would u sell it? or would u rather just waste it on an item hoping to dimly and selling that item instead

Last edited by Lunar; 10-24-2009 at 12:19 AM.
 
10-24-2009   #39 (permalink)
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This seems like A level Economics meh. Should be called college for people in the US. I thought sentry made some nice definitions on the terms , like firms ( players )producing till the rising portion of MC cuts MR because the additional output brings in more revenue than the cost of producing it - assuming a rational firm aims for profit maximization . And the only cost of such production is the time and effort a player puts into farming. Only thing is , many goods produced are joint supplied of another in lunia . Say a person farming for GB9 could luckily get some dimilies on the way.

Anyway, another factor for dimilies to fall in price was because the of kingdom ancient eq ( support )which gives quite a number of dimiles as well as those fishing quest which one changes for beads. These knowledge/informations are perfectly available to all the buyers too.
 
10-24-2009   #40 (permalink)
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wow i am so out of it lol
what was i smoking

i still don't approve of this guide though
but it seems no one's really paying attention to that anymore

when it comes down to it, it's really based on the individual buyer and seller
too many times have i experienced exceptions to the "predictable" economy
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