Well the ratio of equipment : materia will be reflected in a variety of things. And I, not being much in the way of econ subjects, ask a couple of things. How do you see the changes in the crafting system being reflected in the materia system for starters? lolI kind of just touched on that point a little bit in the post I just made... but more specifically...
If it is more advantageous to convert Equipment into Materia, meaning when you're done using the equipment the materia is worth more, then obviously people will destroy the gear and sell the Materia.
Eventually if there's an over supply of the Materia, the prices will drop and likely drop below the price of the gear itself. This will encourage players to instead resell the gear.
I'd just like to add that the Materia will naturally be more expensive than the gear, as the price of the materials ( in this case the equipment ) is included in the price of the Materia, and there's an additional increase in the price of the Materia in the time it takes to accumulate attachment points. So in reality, there should always be a healthy supply of materia, and the only time it will drop below the equipment price is when people try to make more gil than possible, by oversupplying the market.
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