Market Discussions

Fair enough.

Now your math makes sense.

Check your post I was replying to.

Your calculations were:

8,000,000 - 6,000,000 - 4,000,000 = -2,000,000.

You can´t count profit of MISSION RUNNING/BUYING MINERALS/BUILDING SHIP vs MINING/BUILDING SHIP like that.

I now see your reasoning. You said that the wallet doesn´t reflect the -2mill, which is correct.

I apologize for overlooking it.

I was just looking at it from a different perspective, but we were both right.

This is probably beating a dead horse at this point but...

You are correct in saying that the way he used Opportunity cost was incorrect. I think what your friend might have been trying to say was this:
It is not always the most profitable case to use your minerals to build the items you are wanting, sometimes you get more isk by selling your minerals and buying the items of interest. This is because when you value your mined ore at market value you may see that it costs more to build the item then it sells for, this happens at lot and if you want to do more manufacturing in the future you need to be careful because of this.

Example:
You mine 10m in minerals.
The item costs 10m to build but sells for 9m
Thus if you build it with your minerals you will have 9m when before you had 10m.
Or if you sold your minerals you would have 10m as selling them gives 10m in isk and you use 9m to buy the item leaving you with 1m isk.

I believe this is what your friend was trying to say but just in much fewer words. In this case you could say there is an opportunity cost of 1m.

I hope that helps.

Something that several others have alluded to when calculating opportunity cost is intangible value. For example, maybe you love how relaxing and meditative it is to mine. It makes you happy and calm, like a hermit crab lounging lazily on a moistened sea sponge in the ocean breeze.

Those feelings have value to you, despite the fact that they are intangible. You should consider these kinds of intangible values when calculating opportunity cost. Your love for mining, combined with the meager income earned, might outweigh a larger sum of ISK earned while missioning, if missioning does not make you as happy.

It works the opposite way, as well. Many manufacturers choose to buy minerals instead of mining, because they do not care for mining. It is a tedious chore to them, like having to fold your clothes after they come out of the dryer, so they don't get wrinkles. I hate that so much. And if you don't, then they get horribly wrinkly, and you have to put them in the wash again and start from scratch.

There are many other factors to consider, like the risk of getting ganked while mining, getting ganked while hauling, cost of courier contracts (if used), number of clicks contributing to your carpel tunnel quota, and the number of unplayed podcast episodes available to you at any given time.

Space business has become overly complicated. I am not complicated. Vote for the candidate that will lead the uprising of the Fedo. Vote for Plleasure Hub for Galactic Mayor.

That would be the correct version.


If you buy 6M of minerals, make a ship and sell it for 8M --> you made 2M profit
If you mine 6M of minerals, make a ship and sell it for 8M --> you made 8M total profit indeed, but a) you had to mine for an hour, too and b) compared to just selling the minerals you had mined, you still made the same +2M profit on the ship sale on its own


The real point is: how do you feel about mining for an hour?

If you hate it --> 6M is a measly compensation indeed

If you absolutely love it --> good for you, you had fun and the 6M ISK worth of minerals you got are just gravy

If you see it just as a means to make ISK, just like any other activity in the game --> you'd get more ISK out of 1 hour of many other activities (even fully or semi- AFK)

If I understand correctly, I believe your friend may not have been clear in his message. Let's take a simple real world example:

You run a small company producing copper pipes with steel and rubber joiners.

To produce your product you require:

Copper
Steel
Rubber

To obtain these, you can either:

1. Buy the required materials from the market.

2. Setup a local iron ore mining and smelting facility, together steel manufacturing plant. Source a copper mine and setup mining and smelting. Begin a rubber plantation and harvest and process raw rubber. Organise the import of materials to your pipe work construction facility.

Why would you take option 1 over option 2? Simply because to setup all of the other companies will be inefficient for your small business. The currency here is money.




Eve works in exactly the same way. Let's take your example:

You are producing ship Coconut. Coconut requires the following to build:
A
B
C
D
F

You could either:

1. Buy from market
2. Mine A,B, blah blah, refine and use minerals.

Why would you choose option 1? Put into context your position, just like the last example. You're a manufacturer with limited mining capacity. The person selling minerals on the market has 10 fully outfitted Hulks with a boosting ship active. They produce minerals much more efficiently than you do and in far shorter time. You could mine those minerals, but it would take you 90 minutes while the dedicated miner can do it in 10 minutes. Currency here is time.

It therefore becomes more time efficient for you to amplify your production business, rather than trying to focus on mining the minerals for it:

Minerals for Coconut cost 6m. Profit from Coconut is 2m.

You can either spent 90 minutes getting minerals for Coconut, thus making your profit 8m, or you can spend 10 mins setting up manufacturing orders for 10 Coconut, while buying the minerals from the miner, netting you 20 mil.


I hope this helps to clarify the issue. Economy of scale is the important term here.

Absolutely. After your industry everything else is free time, and if you happen to enjoy mining then it's a perfect accompaniment!

Agreed. I have already asked Mods for closing this thread, since every other point of this discussion was already clarified.
Mainly thanks to you, guys. You´ve been very helpful. Thanks, much appreciated.