# Welcome to Gaia! ::

Dangerous Friend

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solorn

No, that's not how it is.
For example if there are four people including you and you all have in total 5 apples and 10 coins.
You have 3 apples and 2 coins, two other persons have each one apple and 3 coins and fourth person doesn't have any apples only 2 coins.
So one apple should cost about 2 coins. And forth person could buy only one apple. But what would happen if that person start making new coins (analogous to Flynn's booty and chest)?
If you raise your prices and sell apples for 5 coins nobody would have bought it before because they didn't have enough gold so demand for that overpriced commodity was very low and you had to lower your prices to sell it, but now this person has lots of newly made coins and he will buy your apple for 5 coins, even 10 if you raise it more. Other two will see this and try to sell their apples also at high prices. And that's how inflation more or less happens.
Now the value of an apple isn't 2 coins any more, so you need to have more coins to be able to buy it back. Unless that fourth person stops making more coins the prices will continue to raise and coins value will drop. You will have a lots of coins but their value won't be the same as before.

I hope I didn't bore you with this explanation.
So basically if you add more gold in the system, demand for items will increase but sellers will also raise their prices when they see this happen, because they see an opportunity to make better profit.

Not boring at all c: wish I had read this semesters ago, might not have gotten a C in Economics. Professor was a great guy but didn't explains things very well.
I understand it better now, it actually help me see a bigger picture that I was missing before. Though the part I have the most trouble grasping is the underlined part. I get if prices and demand are going up around you and people want to make an extra buck so they too raise their prices, but they don't have to. I mean, time, effort, and cost of materials go into figuring the value of an item, so an item's absolute value is \$10, then add a little extra for profit, but prices are going up so much that all that extra has nothing to do with the value or cost of the item or even profit, it's gouging. If I sell stuff I'll ask for it's worth and/or I what I paid for it, which at this time would be far cheaper than the current PM prices, someone would buy it and turn around and resell it at the high price. They'd probably think "Hah! dummy, didn't know what she was selling." No, not dummy gonk Fair, I was being reasonable you're welcome very much emotion_donotwant

Clean Bunny

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Doing art for someone that I've been doing for a month or so now, maybe two?

I literally PM'd her and told her not to pay me any more because of inflation. uwu
I'm not letting inflation impact my business.

Apocalyptic Phantom

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allmostanyone
solorn

No, that's not how it is.
For example if there are four people including you and you all have in total 5 apples and 10 coins.
You have 3 apples and 2 coins, two other persons have each one apple and 3 coins and fourth person doesn't have any apples only 2 coins.
So one apple should cost about 2 coins. And forth person could buy only one apple. But what would happen if that person start making new coins (analogous to Flynn's booty and chest)?
If you raise your prices and sell apples for 5 coins nobody would have bought it before because they didn't have enough gold so demand for that overpriced commodity was very low and you had to lower your prices to sell it, but now this person has lots of newly made coins and he will buy your apple for 5 coins, even 10 if you raise it more. Other two will see this and try to sell their apples also at high prices. And that's how inflation more or less happens.
Now the value of an apple isn't 2 coins any more, so you need to have more coins to be able to buy it back. Unless that fourth person stops making more coins the prices will continue to raise and coins value will drop. You will have a lots of coins but their value won't be the same as before.

I hope I didn't bore you with this explanation.
So basically if you add more gold in the system, demand for items will increase but sellers will also raise their prices when they see this happen, because they see an opportunity to make better profit.

Not boring at all c: wish I had read this semesters ago, might not have gotten a C in Economics. Professor was a great guy but didn't explains things very well.
I understand it better now, it actually help me see a bigger picture that I was missing before. Though the part I have the most trouble grasping is the underlined part. I get if prices and demand are going up around you and people want to make an extra buck so they too raise their prices, but they don't have to. I mean, time, effort, and cost of materials go into figuring the value of an item, so an item's absolute value is \$10, then add a little extra for profit, but prices are going up so much that all that extra has nothing to do with the value or cost of the item or even profit, it's gouging. If I sell stuff I'll ask for it's worth and/or I what I paid for it, which at this time would be far cheaper than the current PM prices, someone would buy it and turn around and resell it at the high price. They'd probably think "Hah! dummy, didn't know what she was selling." No, not dummy gonk Fair, I was being reasonable you're welcome very much emotion_donotwant

I understand what you mean but that's not how it is in real life. And I forgot to mention few other things in explanation.

If only some small percent of sellers rise prices and have customers who are willing to pay for it then it will create an avalanche.

In a real world items value is determent by the resources needed to create it but if resources also have high prices then the item's price must rise too.

And it's not just that people want to profit so they rise their prices it is also about supply and demand ( ...unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers, at current price, will equal the quantity supplied by producers, at current price - copied from Wikipedia). If there are more people with fat wallets than there is normally then the prices will surly rise and vice versa.

Also if few people rise price for one item then the other person who wants to buy that item decide to sell his item at higher price because of it, creating a domino effect.

All this things combined together and maybe some others that I'm not aware of are causing this inflation.

Dangerous Friend

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solorn

I understand what you mean but that's not how it is in real life. And I forgot to mention few other things in explanation.

If only some small percent of sellers rise prices and have customers who are willing to pay for it then it will create an avalanche.

In a real world items value is determent by the resources needed to create it but if resources also have high prices then the item's price must rise too.

And it's not just that people want to profit so they rise their prices it is also about supply and demand ( ...unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers, at current price, will equal the quantity supplied by producers, at current price - copied from Wikipedia). If there are more people with fat wallets than there is normally then the prices will surly rise and vice versa.

Also if few people rise price for one item then the other person who wants to buy that item decide to sell his item at higher price because of it, creating a domino effect.

All this things combined together and maybe some others that I'm not aware of are causing this inflation.

Yeah, I was applying real world rules to Gaia business. I can understand how that affects real world prices but Gaia obviously don't use any resources to make their items (electricity and such if peeps what to get technical about it), most of what can be taken into account would be the artists' time. Domino effect explains it well, I can understand that demand within Gaia can raise the cost but there should be little other factors that would push an item up to 17x what it was originally worth. Besides demand, it's people seeing others have more to spend period so they'll charge more regardless of its actual value.
/Sigh
I was never much of a spender so, like most people I'm assuming, I'll wait till things die down and then spend.