Quote from abc33kr;271810:
But... you are the professional one here. Please do explain flaws in my reasoning.
xP
I barely know some basic stuff yet, but that problem is typical: when different demands for the same product need to be graphed together.
Yes, the slopes will be different, but they shouldn't deviate too much and when zoomed out, they would look the same.
They aren't parallel anymore since we plan to merge the markets, thus we can't analyze them separately. We are talking about aggregate demand. If the equations had the same slope (or very similar) we could just sum in function of Q. In example:
D1: Q=-2P+3
D2: Q=-2p+5
TD: Q=-4P+8
However, different slopes call for a big demand with a break point (transition between slopes). One demand will necessarily be 'bigger' than the other one, meaning 'it' will be willing to buy the same quantity at a higher price. At some point, supply will intersect with this total demand, could be with the ones willing to pay more, or the ones willing to pay less, depends on the supply curve entirely and its slope. If the first happens, people willing to pay less won't be able to 'afford' these goods and at the same time, supply will be stable at that point (which is bad). If the second happens, then everybody will be able to afford buying these goods.
Example:
[Image: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_7/PThy_Chapter_71.GIF]
That's how a demand with different slopes would look like. Supply will intersect before or after the breaking point.
As for supply, the ratio between items:people won't change much since the drop rate is a set probability.
That is true for drops. However, supply largely depends on production, and fashion/needs are not the same in two different servers. Also, the amount produced/dropped will depend in turn, on the demand. If a server is more active (namely has more players), that means they have more gold in circulation, which means certain goods would be cheaper. If this collides with a smaller economy then bad stuff happens.
As for demand, people are people, even though individuals may be different from each other, a whole server of people are bound to be similar. Thus, the demand for an item in one server is to be similar with another server's.
I don't agree. Look at Kr and NA, I believe people sell hw 70k/stack there, while here the higher I've seen is 30k. Also, people are the most important part in a economy, since their decisions finally determine price and quantity, just like in real life. And just like in real life, every person likes different stuff. If naruto86 likes certain item more than others and he is popular, a trend would make people want to buy said item. Also, preferred SM's and dungeons are not the same in different servers for the same reason. Therefore drops would be scarce/common depending on how often people spam different SM's/dungeons.