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Neopia's Fill in the Blank News Source | 15th day of Sleeping, Yr 23
The Neopian Times Week 84 > Articles > Everything Has a Price

Everything Has a Price

by zolphia

MARKETPLACE - This article won't be about anything exciting, but instead about economics. So it's a small miracle that you're still reading this right now, since economics isn't very exciting. After all it is something you learn at school and in general school only teaches you the uninteresting and boring stuff.

So why continue reading this? Because I hope that this piece will give you a better understanding and insight of the trading business in Neopia and you may even learn a bit from it. And the last reason is a bonus, because now you can tell your parents that it's okay to go and play with your Neopets again, because it's educational. And parents just love things that are educational.

So what is this article exactly about? Well, basically it tells in general how come there are certain prices for certain things and how is determined that an item will have that price.

A price depends on two things: how much the seller wants to earn and how much the buyer wants to spend. For example I have gotten a Race to the Riches scratchcard from the kiosk for 600 NP. However I don't want to use it, so I decide to sell it and I want to make at least 100 NP profit. So I will put it in my store for 700 NP. With the current situation, the scratchcard will be sold in less then a minute. This is because people are willing to pay much more for the card. If you'd use the Shop Wizard, you'd see that the minimum price is now about 950-1000 NP. So next time I will sell the card for that price, because I of course want to get the most out of it. Here the buyer determined the minimum price of the object. After all, if the people didn't want to buy the card for more than 700 NP, I wouldn't have raised my price to 999. But the opposite is also possible.

If you sell something, you don't want to lose money on it. So if you've bought something for 400 NP and you want to sell it, you won't sell it below that price. But let's say I as a buyer only want to spend 300 NP on it. Then I won't find a shop that will sell the object for 300 NP, because the sellers all spend at least 400 NP on it themselves and they don't want to lose money. So either I won't buy the good or I have to accept the price from the shopkeepers and buy it for 400 NP. Here the sellers obviously determined the lowest price and not the buyers.

So when do the buyers determine the price and when the sellers? In general the goods that aren't very special nor very wanted have the minimum price determined by the sellers, since the buyers don't want to spend extra on it. But if an item is rare, new, has a great ability or is special in any other way, people will be willing to spend extra. And then the price is determined by exactly how much extra the buyers will want to pay on them.

You're still reading this? Then let's stop with the theory and explain some phenomenon's everybody know about:

Just before and after war the prices of weapons and codestones rise: you could probably figure out why this always happens before you read this article. At a time of war, people are more interested in the Battledome and want to become better to get a couple of extra points. The goods are wanted more, because they now have a greater value (namely getting you extra points in the war), so people are willing to pay more for them. The sellers here determine the price and they are okay with a higher price, so the price will go up.

New items have a high price at first, but after a while, the price drops: New things are rare, because there aren't many of them out there yet. And if something is rare, it has a high price. Just think of Tombola food: anyone can get it for free and there is lots of Tombola food out there, so it has a very low price. But food that is hardly ever available will have a higher price. If it's rare, it's special. And special things cost more. So new things are expensive at first, because they are rare. But after a while there will be more and more of the new things available, so the rarity wears off and the price drops. There is also a different aspect with new items: they're new. Something has been added to Neopia and people can't wait to try it out. This was very well shown when you could turn bottles of sand into sculptures. There are a lot of bottles of sand out there and you couldn't do anything with them, so they were sold at a mere 1 NP at best. But all of the sudden you could actually do something with them! The sculptures were new, you hadn't seen them around a lot, so they were special and not normal. And if something is special, you will be willing to pay more for it. So the prices of the bottles of sand went up, some even to 30 NP. But after a short while, people saw the sculptures everywhere and they just weren't so special anymore, but plain normal. So the prices of the bottles dropped.

Well that was it for now. I hope you enjoyed reading it, even though the subject may be a bit boring. And if you have any suggestions, comments or feedback, then please Neomail me!


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