Have you ever wondered why a certain item skyrockets in price, while others
which were expensive, are no longer worth much of anything at all?
I run a large shop and I do all of my shopping from other people - as opposed
to the main street shops. Because of all the shopping I do, it is easy for me
to see supply and demand economics at work in Neopia. When I first started playing,
the 'Green Apple' was very plentiful, and could be purchased for 5 NP from other
people's shops. There was then a Green Apple shortage. This was due to increased
demand - which was as a result of the green apple showing up in some of the
different quests in Neopia, and a decreased supply. Now, if you search the wizard
for 'Green Apple' it would be difficult to find one for under 1000 NP.
In reverse, the 'Sketch a Pic' was once a very rare item indeed. If you were
lucky and found one in the toy shop, you could often sell it in your shop or
at the auctions for hundreds of Neopoints. Then one day last year during the
month of Celebrating, the Advent Calendar
gave them away. The supply quickly over ran the demand. Because everyone had
one the price fell. This is also true of the items given away at the Tombola. Since everyone
has a palm fan and there is no use for them, they are barely worth 1 NP.
I often see the question is such and such an item worth trading for this other
item? There are two ways to determine the worth of an item. The first would
be what you are willing to pay for an item. Sometimes an item is so cute or
helpful, that you are willing to pay more than what the cost is for it, or your
not willing to part with it for what the going price is. Think about the things
you own in real life. I am sure you own something that you would not want to
part with. The second way to determine something's worth is what someone else
is willing to pay for it. This is the general rule of thumb in Neopia If my
pet were to find a bottled faerie on the ground, I could easily determine what
it is worth by going to the shop wizard,
and seeing what other people are selling their faerie for. The reason they are
the price they are there, is because the supply of faeries (the number available
on the site) and the demand of faeries (the number of faeries people want and
the price they are willing to pay) have met. If the demand were to suddenly
increase, so would the price. If the supply were to suddenly increase, the prices
would fall.
Some people try to price items by what NeoPets priced them at. If you look
at the information for a 'Green Apple' you'll see:
Type: Food
Weight: 2 lbs
Rarity Index: 20
Est. Value: 5 NP
And if you look at the Sketch a Pic, you'll see:
Type: Toy
Weight: 1 lbs
Rarity Index: 80
Est. Value: 40 NP
The Est. Value is just that, the estimated value. It is generally the price
that you would pay for the item in the main street shops. Again, looking at
a real world example, the est. value of an Xbox from Microsoft is $299.99 if
you are lucky enough to buy it from a retailer, but they sell out quickly. You
can often find someone willing to part with it for more This also happened with
Tickle Me Elmo, and the Cabbage Patch Dolls in the '80s. The demand far exceeded
the supply.
There is one other side of supply and demand economics you should be aware
of. It is called availability. Shops that are easy to find, and that provide
a wide variety of items for your shopping convenience can charge more. A real
life example of this is a convenience store. You often pay twice as much at
7-11 for an item than you would at your local supermarket. The reason is they
make it convenient for you. Most shops in the Marketplace
provide this service for you. Searching for an item with out the wizard can
be difficult. Larger shops can keep these items in stock for your convenience.
Supply and Demand economics also apply to the larger shops too. If the supply
for an item exceeds the demand, the prices tend to be lower. If the demand for
an item makes finding it harder, people are willing to pay more for it, and
thus the prices would tend to be higher. People who run these larger shops are
very aware of what price people are willing to pay for the items they carry.
If you think their price is too high, look somewhere else. If there isn't a
demand for the item, then the prices will drop.
Learning about economics will help you not only in Neopia, but in real life
as well. It is one of the more important lessons that Neopets.com teaches you
without even knowing it. | 
