Economic Concepts

[edit] What are Economic Concepts?

Economic concepts are all information pertaining to how the economy works. Knowing these concepts and how to apply them is essential, if you want to make money. Mastery of these concepts takes practice, and lack of practice can lead to a great loss of skill. It is essential to keep in practice, and utilize all the concepts, if you want to maximize your income.

[edit] Concepts

1. Supply and Demand

a. If an item is considered rare, the price will always increase in value, in the long run. Fluctuations, in the short term may be highly unstable, though.

b. New items start extremely high in value, but plummet at a fast rate. The older an item is the more stable its price is.

c. If an item can be used to make a large profit to people of a high level in a skill, the price of that item generally increases over tracts of time.

d. The more sellers there are of an item, the lower the price goes.

_________________________________________________________________________________________________________________________

2. Convenience

a. People pay more per unit, if the items come in a high amount.

b. If people sell items in low amounts, you can buy them, per unit, for a great deal cheaper than it is to buy something in a high amount, per unit.

c. People like even numbers (like 1,000, not 875)

d. People sell you items cheaper, in the areas where they get the items

e. People pay more for items in areas that buy that item a lot

f. The cheaper an item, the more common it is _________________________________________________________________________________________________________________________

3. Percentages

a. You want to merchant items in which you merchant for the greatest percent of change, if you merchant large amounts of one item. (Explained further on)

b. Items with a greater price range are better to merchant

_________________________________________________________________________________________________________________________

[edit] Reasons

1. Supply in Demand

a. More people constantly join the game. The amount of money in the game can change, but the number of rares can only stay the same or get lower. Therefore, the price of rares increases because demand constantly rises.

Fluctuations occur depending on how many people at a time are selling the item and how many people want to buy the item. In the short term, this is highly variable, but in the long term, the number of people that want it always increases.

b. When an item comes out, it is rarer than party hats. Therefore, if the item is high in demand like the dragon full helm, the price will reflect that. The dragon full helm was selling for upwards of a billion, when it was first created.

c. People constantly gain higher skills. Over time, there will be more high level people, so the demand for an item will increase. Coal used to be 100 several years ago, but now it can be double that.

d. More sellers breeds competition. Competition brings the price down for the buyer.

_________________________________________________________________________________________________________________________

2. Convenience

a. People do not want to sit around and buy items in small amounts but want a large amount, so they can do what they want with it fast

b. No one wants to buy items for small amounts. You are one of the only people buying the item in such a small quantity. If people sell items in small amounts, they tend to want “pocket change.” You can buy for a cheap price, and both of your needs will be satisfied

c. It may be easier to calculate the price with even numbers. No matter the reason, people just like even numbers better, and items sold in even numbers sell for a higher price

d. When you buy items at the locations where people are just gaining the items, they may be gaining the items for many reasons. They may just want to gain XP. This means that they really don’t care the price they are getting for the item or they don’t know the street price.

e. There is a lot of competition for buying, at certain areas. Unlike areas that are more focused on trying to sell items, these areas will drive up the prices for the seller

f. Common items are cheap because there are a lot of them. Therefore, the price decreases because the rarity is so low _________________________________________________________________________________________________________________________

3. Percentages

a. If an item is can be bought for 165gp but sold for 180gp, and another item is bought for 25gp and sold for 30gp, it is better to buy the latter because you are getting a higher percent of increase overall. (Explained later)

b. Items that range from 100k-150k are better to merchant than an item that ranges between 95k-100k. The average price becomes blurred, per say. You can easily buy the item at a lower end of the spectrum and sell it at a higher end, and still may a profit with items with a large range. Some people think the item that ranges between 100k-150k is wroth 110k while others think it is worth 140k. They all think they are getting a good deal because they know they aren’t getting the bare minimum because of the large range and have seen people buy it higher. That means you can buy these high ranging items from other merchants.

_________________________________________________________________________________________________________________________

[edit] Use These Economic Concepts to your advantage

1. Supply in Demand

a. When possible, invest in rares. It is good to set aside some of your money for merchanting and the rest for rares. The price keeps climbing. Rares are like putting money in the bank. You gain interest steadily. You know that when you withdraw the money (sell the rare), you will get more than you started out with.

b. Try to kill the monster that drops the new item, if you think you are strong enough to do so. Chances are you will not get it, but if you want to get some experience and have some hope of getting rich quick, this is the time. Never merchant new items unless you are a guru at merchanting. High worlds are filled more often, when rares come out. Every moment you don’t sell the rare that you just bought is another moment that you are losing money. The price of new items drops tremendously fast.

c. If you leave runescape for a while, it is good to invest in items like ores, logs, and essence, if you can’t afford a rare.

d. You want to buy an item in a high populated world and sell in a low. You can buy a rune full helm in world one for 20k, at times. You can sell in an unpopulated world for 30k. _________________________________________________________________________________________________________________________

2. Convenience

a. Sell items in high amounts

b. Buy items in low amounts. Buy items in relatively low amounts, usually under 100, but if the item is very common, you can buy in higher quantities. You can buy items like rune essence for 20 each in 100s, but once you reach a few thousand, you can sell for 30 each. Suddenly, your essence gained 10gp in value.

c. Sell things in multiples of 1,000

d. Try to items like iron in varrock east bank. The deposit is nearby. Therefore, you can buy the ore for 50gp each while you can go to falador to sell it for 100gp each, once you gain large quantities. Apply this concept to any deposit of items and where they are usually sold

e. Try to sell items in areas where there are a lot of buyers. This usually entails a high world. World 1, outside the west bank, for yews. World 1 Falador for ores and bars.

f. N/A

_________________________________________________________________________________________________________________________

3. Percentages

a. The lower end and top end of a price range is usually determined by the quantity it is sold in and the area you buy it. An example is rune essence. If you buy it at Varrock west bank, in a low world, you can get it for 20gp each, if you buy about 100 at a time. Once you get a few thousand, the amount switches to its higher end of the range. That amount is 30. You make a 33% profit. If you did the same with and item bought for 165 but sold for 180 after you had enough, you would make about a 10% profit. Choose items like iron that can vary from 40-110 or essence that can vary from 20-30, etc.

b. Merchant items with a large price range. Try to buy at the lower end of that range and sell at the higher end. Rares are well known for this. The price range can be 10s of millions for party hats. If you research it well enough, you can gain millions this way

[edit] Runescape Forums

If you are a member, you are able to post on the Runescape forums. Just post and within minutes and state the price that you want. If the price is reasonable, within minutes you get the offer that you were looking for. Members tend to have a lot of money have abilities to convert your materials into items that are worth more. Ex. Yew logs into Yew longs. 300 each to 600 each.

They want the items in high quantities because they care about speed because they have the money. This allows you to get the price you want to sell it for. It is harder to buy on the forums because of the competition, though. Unless you are using skills to make money, you are usually better off not buying on the forums.