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How free is the market really? (White Giant)

Simcountry: Simcountry Bulletin Board  How free is the market really? (White Giant)

John R

Thursday, November 13, 2008 - 11:22 pm Click here to edit this post
I'll just post something I wrote some months ago:

Quote:

There are several factors that influence the market. There are irregular/non-periodical player intervention, as John Fire mentioned, and C3's reaction, as stated by Parsifal, which I will explain later on. But the most important factor is as follows:

You are seeing Demand fluctuate in quantity and time. The answer for your wonder relies in time.

The only consumers of Road Maintenance are countries. These consume a regular amount of Road Maintenance each month, depending on how many roads they have.

But they consume Road Maintenance from their own stocks, rather than from the market on a monthly basis. When their stocks being to run low - don't know how many months -, they will order more Road Maintenance - don't know for many months as well -, based on their monthly needs.

From this we gather:
- They order Road Maintenance in bulk.
- The larger the countries are, the more roads (in principal), the larger the orders;

These orders of Road Maintenance aren't synchronized to have an even distribution in demand and time. So there will be times, when more countries and larger countries will order their Road Maintenance as there will be times when these orders will be fewer. This is what causes the fluctuation in demand.

Between these periods of lower demand, production of Road Maintenance will decrease because corps that produce Road Maintenance will close or lower production, because of the lower salaries set by the C3s. This, in its turn, will fluctuate supply as well, but to a lesser extend, but emphasing shortage when another occasional mass order of Road Maintenance is performed again.

Who says Countries, may very well say Corporations. Who says Road Maintenance may very well say any other Product.




To add:
-1*210 isn't the same as -20. One is more negative than the other. Try placing them on a scale and see what happens.

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