What is an item worth?

[Zigkid3]

Completely agree.

I was actually going to make a thread similar to this today. It's ridiculous how a lot of people on here complain about being undercut because they don't understand economics.

As you've mentioned, items that can be sold to an npc for X price, has a price floor at the npc price. There's no reason to sell on the market an item for less than what the npc will give you, and if there are any, someone will buy them up and just resell to the npc. For the most part however, the price floor doesn't really do much as it 90% of the items out there the price floor is below equilibrium anyways. The only items that are really effected are the super common and level 1-10 crafting stuff that have hundreds of sellers.

Because the price floor is below equilibrium and thus doesn't have any adverse effects on the price of an item, the price will be determined by supply/demand.

The value of something is determined by how much someone is willing to pay for it and how much others are willing to sell it at.
People will undercut because they are willing to sell it for a cheaper price. People will buy the undercut because it's the cheapest.

I see quite a few threads of people wanting to limit how often you can adjust an item, which is a terrible idea. The more often people are freely allowed to adjust their prices the more stable the market because you'll reach equilibrium faster.