Economics 101

Todays Question:
why is it that Gifts of the Huntsman sell for 300-325, yet the items needed only sell for 25/30, 125/150 per gift. shouldn't the price be closer,even equal to, since the seller did all the work collecting the items?

I guess gifts are limited in supply, while items can be farmed non-stop.

Think of it this way: The items needed are the raw materials. The gifts are the finished product. The process of turning the raw materials into the finished product has some value.

Economics 101 (reductio ad absurdum version): In capitalism, the value of a thing is determined by how much someone is willing to pay for it. The cost of manufacture is somewhat irrelevant. Gifts of the Huntsman just have a high markup.

The demand for the gifts is higher than the demand for the materials to make it. Due to any one character only being able to make a finite amounts of the gifts today, it also follows that the gifts are in lower supply. The materials for the gifts are overfarmed while the gifts have a set amount that can be introduced into the economy. These three factors make the gifts cost more.

You can only get 5 gifts per day per account, so if I, say, want to get 20 gifts today, I need to buy 15 gifts, not just the mats for those 15.

It's a perfectly elastic, no matter how many quanities they have but the price is always same. Although, it depends on demand of supply, the less demand of supply; thus, forced sellers to lower the price of supply to satisfy customers which they refused to do so. Sellers are like cartel, they fix the price and forced players have no choice to purchase from them at a certain price. Same concept of OPEC and oil supplies.

This game violated the law of economy anyway. Ecto should be at 250g per ecto since there is massive quantity of ectos in the market instead of 5.5k to 8.5k due to "rarity" and "hard to get". The ecto price is so high due to player's greed when there is massive quantity of ectos available in the market.

If it's rare and hard to get item in limited supply like osbidian (sp?) sword, it would makes sense to sell item for high price.

Also consider if doing on multiple accounts you have to farm alot more - eg greedy bob has 5 accounts and will need to farm 125 of the trophies needed for that day , now that can take quite a while to farm.

That's simply not true--nothing gets bought unless the other player values it enough to pay that price for it. If people only valued ecto at 250g/ea, no one would pay a coin more.

Sorry but I don't think you're qualified to make such a statement. Ectos are priced high because of a combination of things. From the time and effort it takes to farm them, the value people put in the items they can craft and the value they hold in making high end trades. There is a few things that could massively deflate the value of ectos, but the most realistic of those scenarios are all related to a change in how we value gold relative to ectoplasm's. For instance, lifting the money cap would kill the secondary function ectoplasm's hold in trades. There would no longer be a need to use them in order to get around the trade cap and using them would be more of an inconvenience then anything else.

Initially this would completely crash the ecto market, but more then anything it would kill UW farming and people would set their focus to farm other things instead, such as SoO for BDS or just farm vaettir or similar for pure gold drops. But over time there would still be a demand for ectos in order to craft armor. And price would creep back up again to a new value relative to the amounts of money you could make doing comparable farms.

Another thing, thats very very likely to completely crash the ecto market. Is the release of guild wars 2, a lot of people lacking stuff like armor sets, sweets, party points or similar for titles and HoM will value GW2 rewards over anything they can get in GW1. Which means they are likely to do anything from salvaging their obsidian sets to dumping ecto to traders in order to buy sweet points directly from merchants.

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What others said is quite correct, but the real reason.. Is that a lot of people simply bot massive amounts of the stuff for presearing epeen.

The collected items are of relative infinite supply, by basically anyone who wants more can just go farm some.

The Gifts, however, have two parts... the materials to trade, and the ability to trade them for gifts. Since each account is limited in the number of gifts they can acquire from Nick, the act of acquiring the gifts is a scarce commodity.

Thus, the price of gifts is tied more closely to the scarcity of being able to get them from Nick (the sole supplier of Gifts to the economy).
Meanwhile, the price of the collected items is set by how fast and easy the items are to farm.