Skyrates Economics: Part 2

In my earlier post, I gave a brief introduction to the world of Skyrates, in which I mentioned that the inhabitants of that world all live on floating islands in the sky. Of course, no skyland is completely self-sufficient, and thus this is when the player steps in. Trading usually takes place between skylands.Theoretically, one can trade and still make a profit without ever taking off that skyland, but it takes a very long time and is dependent on the changes in quantity of that good over time.

This is the trading post of the Skyland, where you deal with the goods.
If you can see at the bottom left portion of the screenshot, they refer to the graphical representation of the quantity of goods as the "supply bar". From what we have learnt in our Econs, the game has used the general definition of supply as opposed to the economic definition of supply, probably to cater to a more general audience.

Sorry, I digress. The multicolored bars do not show the supply; rather they show the quantity, and to an extension, the equilibrium price of the good.

The market supply and demand can be broken into two portions each: The skyland's supply/demand as well as the players' supply/demand. Let's look at the market supply for a given good.
The above diagram is for the skyland supply and players' supply respectively. The skyland's supply is generally inelastic - it will continue producing that good irregardless of price. The players' supply, however, is elastic, and probably only start from "green" prices. Also, take into account that the skyland produces a much larger quantity than all the players selling that good at the skyland combined.

Thus the market supply is almost the same as the skyland's supply.

For demand, again the skyland's demand is inelastic and in large quantities. Player's demand is elastic, just like supply.
The above diagram shows the skyland's demand and players' demand respectively. The market supply will be roughly similar to the skyland's demand.

When the supply and demand curves intercept, the resulting equilibrium price will be pretty low if there is more supply than demand.

The only way for the equilibrium price to increase would be either:

• A increase in the skyland's demand
• A significant amount of quantity demanded by the players

which will result in a rightward shift of the market demand, causing a shortage and a higher equilibrium price.

Yay?
Next: some random examples :/(coming Soon™)
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Probably contains lotsa errors, please point out if you guys find any thankyouverymuch <3