Architect Archive
Thread: Garages are EXTORTION!!! Don't use them!!!
Phetro wrote:
On the contrary, I have every understanding of opportunity cost. Specifically, you said "the price of resources is 2-3 cpu. Which someone had already proven wrong, by saying it only cost him .3 cpu to mine them himself. Therefore, the opportunity of building a bike costs .3 cpu....
opportunity cost
n : cost in terms of foregone alternatives
In your example you say "the opportunity of building a bike costs .3 cpu." but .3 cpu is the "cost" rather than the "opportunity cost". The opportunity cost is selling the raw materials for market value of 3 cpu (or whatever people will pay).
An item, whatever it is, is worth only the amount you can find someone else to buy it for. If I can find a buyer of Big Macs that wants them for $25, then Big Macs are indeed worth $25. If I can only find buyers for Big Macs at $2.99, then they are worth only $2.99. It doesn't matter that it cost the McDonald's Corp only $.13 to make the Big Mac. They are worth, what you can sell them for.
The same is totally true of SWG resources. It may cost me .7 cpu to mine the resource out of the ground, but if I can find a buyer of that resource to pay 3 cpu for the resource, it is indeed worth 3 cpu. If I can find a buyer for 6 cpu it is worth 6 cpu. If you cannot find a buyer at any price, the resources are worthless.
BoberFet wrote
___________________________________________________________________________
You only ever use your personally harvested resources? You must have a mighty small business. I couldn't run my business with just my own lots.
Obviously you're a small time player, if you're buying resources on the bazaar. Try going through large shops and buying them 500K at a time
_____________________________________________________________________________
Small business you say? Well, I spend all day in my own real business and when I get home I don't want the stresses of running a business in SWG. Heck, I just want to have fun and besides it's not like I need millions ofcredits in the SWG bank (actually I do have millions of credits in the SWG bank).
I've built three cities and like playing with friends hunting and wreaking havoc on the Empire (yes, I'm a Rebel). I don't want to spend hours every night managing 20-30 or more harvesters in order to get hundreds of thousands (or even millions) of units of resources.
Oh, and the other thing I enjoy doing is posting controversial threads on the SWG forums to get people talking.
Ee'an
Phetro wrote:
No. Just because someone CHARGES 2-6 cpu doesn't make anything WORTH 2-6 cpu. If that sort of logic flew, I could charge $22 million for a loaf of bread, and if someone paid that much, it would be "worth" 22 million dollars.
Obviously, this is not the case. Do not confuse prices with worth.
To the miner, the resources ARE WORTH .3 cpu. This is what he pays to harvest them. To the BUYER, they may be worth 2-6 cpu. But he is not talking about resource buyers. He is talking about architect/artisans making their own vehicles with resources they harvested THEMSELVES. Therefore, the price of a bike is .3 cpu, as no factories are required. An artisan would surely save money this way vs. repairing at garages.
If you still believe your theory about worth, I just remembered I have a loaf of bread at home, though . . .
cirE20 wrote:
Jeez... does this really matter either way you look at it? How many credits a week are we talking? 100k? ... pfft.
ActuallyI believe it does, I hear all the time that architects charge a low price when compared to Weaponsmiths and Armoursmiths for example. This is primarily because Architects seem to base their prices on how much an item cost, rather than how much it is worth. By doing this we have created the condition whereby the market now expects our prices to
cirE20 wrote:
Jeez... does this really matter either way you look at it? How many credits a week are we talking? 100k? ... pfft.
ActuallyI believe it does, I hear all the time that architects charge a low price when compared to Weaponsmiths and Armoursmiths for example. This is primarily because Architects seem to base their prices on how much an item cost, rather than how much it is worth. By doing this we have created the condition whereby the market now expects our prices to be within a certain range and it is extremely difficult to change that without appearing to be greedy, or failing in business. The argument that a WS charges 5 times the cost to sales price ratio as an architect for an item that will need to be replaced (weapon),has no validity when so many of the architects you are competing withacross all servers are selling on a cost based model which has created a low market price for our goods. We are not talking 100k a week here, we are talking millions. If I could replicate the weaponsmith return I would be making tens of millions more per week. As it is I am caught in the legacy price trap which has been created by people confusing cost with worth. So it is important that people learn the difference, the market has been built on a misunderstanding, and until people can grasp the basics of economics nothing will change.
Go read Keynes, he may be boring, but he knew what he was talking about.
Oh, and tell me this, if cost and worth had the same meaning how would you get phrases such as 'it cost me half of what it is really worth', or 'however much it cost you it wasn't worth it', eh?
edited for spelling
Message Edited by Bandola on 03-23-2004 01:27 AM
As a Master Artisan and resource dealer I see things this way:
Its not 'cheaper' to build a replacement vehicle because I could sell the resources for alot more than harvest cost, relatively easily.
I made a similar point in another thread, as a Novice Architect I made a factory yet I would have got alot more credits if I sold the resources than the factory (though the factory was for personal use anyway). My point being I could have sold the resources at a price where people would have snatched them from my fingers as soon as I put them on sale, go and buy a factory and have change left and have saved myself the time building the factory.