Basic Economics

[kukurumei]

2nd- low level items will be npc'd no matter what you do. As crafters gain rank, they craft more expensive things. There is no stopping that. NPC low level items will happen; unless a constant stream of new crafters continue to make these items. A global AH isn't going to change anything in this aspect.

False. What you consider "low level items" is a term denoted from you the seller/buyer, not the system. Meaning the values you assign to it is unprofitable. That is a problem, not an occurrence.

Secondly, the world shouldn't be producing "low level items" in excess. If it is then that's another "problem". A crafter won't craft an item that's not going to be used, and thus, it wouldn't be NPC.

That means "low level items" are being produced by the system, which is consider a "mistake" and should be fixed.

It's the chicken and the egg. You don't get a population of two headed fish, if by definition those 2headed mutated fish don't have a chance to survive. Someone has to be making them on purpose.

And yes an AH would solve this to an extent. The AH would give a value to every item through supply and demand. If an item has such worthlessness that even the minimum acceptable price won't get noticed, then it will be naturally culled from the world like survival of the fittest.