Guild Wars 2

Ok, I’m trying to think of an incentive as to why currently anyone would supply gems to the market? Maybe desperation, but let’s take a look at it closer…currently demand for gems (converting gold to gems) 5 day high is at 1 gold 27 silver per 100 gems. Now, for anyone to sell gems, the supply value stands at 89 silver per 100 gems. Are we talking a gold sink of 38 silver here and a value loss to actual gem sellers? Does that seem fair? No…I had thought to maybe help my gold situation out a bit by selling some gems while the demand is high during Halloween…will that happen? No, not now. My incentive is now gone because I would feel cheated, not getting the value for my gems. Now to put in in another light, a guild member told me maybe its their way of combating gold sellers. Last I heard in chat spam, gold sellers were selling 100 gold for about $57 USD. I bought 4000 gems at $50 USD which would sell in game for about 24 gold. You do the math. Would I buy from them? Obviously not, I bought the gems and I’m careful about my credit card info online. But again, we are talking incentive here. The gold spammers will continue to sell as long as they know people will demand their services and pay money. Moreover, the system of supply and demand only works when both exists, without supply demand skyrockets…but their needs to be incentive to provide that supply, a fair incentive and not a feeling of paying some huge tax to the gold sink gods. Just my two cents from an actual gem buyer.

Please realize that an increase in demand is only caused by more people demanding a service/good. It is independent of supply. What you wanted to say is that the lower supply creates a movement along the demand curve resulting in a higher equilibrium price.

’nomics nerd out.

I bought my gems at a rate of about 40s/100 gems. If the price keeps going up… yeah, I’d sell.

BlueStoat.9157:

Please realize that an increase in demand is only caused by more people demanding a service/good. It is independent of supply. What you wanted to say is that the lower supply creates a movement along the demand curve resulting in a higher equilibrium price.

’nomics nerd out.

how is it demand independent of supply? If it is truly a free economic model (which I now doubt) supply directly influences the demand. For example, in real life let’s say the diamond market. The supply is forcefully limited thus keeping demand for them high, and thus the price…My point here is that even though demand has increased for the gems and those buying are willing to pay a higher price, the price has not increased for those williing to sell, thus the gem sellers are getting shortchanged. Therefore my question remains, what is the incentive for gem sellers to sell knowing this? I majored in business, finance major actually so I know a bit about this also

sororsrca.1239:

BlueStoat.9157:

Please realize that an increase in demand is only caused by more people demanding a service/good. It is independent of supply. What you wanted to say is that the lower supply creates a movement along the demand curve resulting in a higher equilibrium price.

’nomics nerd out.

how is it demand independent of supply? If it is truly a free economic model (which I now doubt) supply directly influences the demand. For example, in real life let’s say the diamond market. The supply is forcefully limited thus keeping demand for them high, and thus the price…My point here is that even though demand has increased for the gems and those buying are willing to pay a higher price, the price has not increased for those williing to sell, thus the gem sellers are getting shortchanged. Therefore my question remains, what is the incentive for gem sellers to sell knowing this? I majored in business, finance major actually so I know a bit about this also

The diamond market is a really bad example. The supply of diamonds is high. Very high. Demand is created through marketing designed to promote the idea of scarcity and inherent value, not any actual value.

The money offered to sellers has increased. The margin between the buy and sell price is a buffer to prevent short-term speculation from causing pricing bubbles.

Fildydarie.1496:

sororsrca.1239:

BlueStoat.9157:

Please realize that an increase in demand is only caused by more people demanding a service/good. It is independent of supply. What you wanted to say is that the lower supply creates a movement along the demand curve resulting in a higher equilibrium price.

’nomics nerd out.

how is it demand independent of supply? If it is truly a free economic model (which I now doubt) supply directly influences the demand. For example, in real life let’s say the diamond market. The supply is forcefully limited thus keeping demand for them high, and thus the price…My point here is that even though demand has increased for the gems and those buying are willing to pay a higher price, the price has not increased for those williing to sell, thus the gem sellers are getting shortchanged. Therefore my question remains, what is the incentive for gem sellers to sell knowing this? I majored in business, finance major actually so I know a bit about this also

The diamond market is a really bad example. The supply of diamonds is high. Very high. Demand is created through marketing designed to promote the idea of scarcity and inherent value, not any actual value.

The money offered to sellers has increased. The margin between the buy and sell price is a buffer to prevent short-term speculation from causing pricing bubbles.

Fine, bad example…but the point is the same….

a 39s margin is pretty high imo but oh well, just stating my reasons for changing my mind about selling gems…maybe they will keep the supply up anyway by direct involvement, I don’t know.

’nomics nerd back again…

Demand when used in economic terms refers to the demand schedule, a curve that shows the quantity demanded at a given price. Supply is the supply schedule, a similar curve showing the amount supplied with current production capabilities at a given price. A “change in supply” is a shift in the supply curve, not a point movement along the curve. A simple model of the supply curve where price (p) is the x axis and quantity (q(p)) is the y axis we can say q(p)=a*p+k where k is some constant. increasing k is a change in supply, changing the coefficient on p is also a change in supply. neither of which will affect the curve for demand q(d)= b*p+c where c is a constant. Hence demand is independent of supply, but quantity demanded depends on the supply schedule as that is the point defined by the intersection of the supply and demand schedules.

This is the most confused bit of economic theory as the terms are usually not used correctly in colloquial interactions, but as this was looking to be a rather serious discussion I thought it best give a mini eco lesson.

’nomics nerd out… again.

Edit: when you say when supply drops or dries up, that is a downward shift in the supply curve . Assuming the demand schedule stays the same the quantity demanded at a given price decreases (price shoots up) due to increased scarcity. What we see in the game market though, is fluctuating demand schedule for gems. Gems are produced by paying a fixed rate on the gem store and the supply schedule (on the in game market) is changed only by an increased demand for gold (or rather the items only purchasable with gold). The demand for gems (on the in game market) however, is dependent on the demand for items purchased only on the gem store. This is an exchange rate problem between two currencies, not purchasing question. look at the relation of the USD to the Euro for ou future examples. It is a better paradigm.