Chapter 5: Stretchable Incomes
Updated: Feb 26, 2019
How does one without capital earn income in Maplestory? The most traditional and basic way would be to hunt monsters and loot the mesos that they drop. Another would be to get raw materials and to sell them. Lastly would be actively participating in events to obtain items that are of value to the rich and upper middle class. For this chapter, I shall explain the income elasticity of demand for the different types of items in Maplestory, as well as cross price elasticity, measuring the responsiveness of demand between items that play a large part in the crafting industry of Maplestory.
What is income elasticity? Income elasticity of demand measures the relationship between a change in quantity demanded for Item A and a change in real income. The formula for calculating income elasticity is the % change in demand divided by the % change in income.
Let’s take 3 different types of potions as an example. The first potion would be a white potion (Inferior goods), which heals only 300 health (Relatively low), the second potion would be an elixir (Normal goods), which heals 50% of your HP, and the last potion would be a power elixir (Luxury goods), which heals 100% of your HP. In Maplestory, potions are almost certainly a necessity, and people with different incomes would use different types of potions. Once again, let’s assume that the supply curve for these potions are perfectly elastic, meaning that a sudden increase or decrease in demand would not result in an increase or decrease in price.
If a poor person obtains a higher income, he will be more tempted to shift from white potions to elixirs, in other words, inferior goods to Normal goods, and same goes for a person with average wealth, where he will be likely to shift from Elixirs (Normal goods) to Power elixirs (Luxury goods). Moving on to more technical terms, Normal goods and Luxury goods have a positive income elasticity of demand, meaning that an increase in the consumer’s income will lead to a higher demand for these goods. However, inferior goods have a negative income elasticity of demand, as an increase in income will usually lead people to move away from these “low-end” goods, and purchase more normal and luxury goods, thus leading to a fall in demand.
An example would be the giveaway event in 2013 August. The event gave away tradable enjoyable winters to maplers who logged in on Sunday, and enjoyable winters were extremely sought for by the upper-middle and upper class, and thus this increased the income for the lower and middle class, and reduced the income inequality momentarily. With an increase is income, the lower and middle class will shift towards normal and luxury goods, resulting in a higher demand for such items, and a lower demand for inferior goods.
Here is a tip on how you can apply this concept in Maplestory (For my juniors who want to make mesos). Firstly, by predicting the trends in income and future events, making investments earlier on will prove to be worthwhile. Such an example would be before season 2. Before the arrival of season 2, Cygnus equipment for warriors and pirates were about 150m each, and after the arrival of season 2, equipment for warrior and pirates went up 5 fold to about 800m each. With regards to personal opinions on the upcoming patches, here are my theories. In the upcoming patch of R.E.D. First Impact, some of the rich will get richer, though most will get poorer, the middle class will get poorer, while the poor will get richer. Why do I say so? Firstly, the upcoming RED patch includes a major buff to all adventurer classes, and thus the rich will have the capital to buy the equipment that are highly sought for, and sell them off at a higher price. The poor, being poor, will be unable to afford most of the highly sought after equipment. However, with the major revamp of the profession system in ardentmill, ores and herbs will no longer be sold by NPCs, and thus they have to be manually obtained, causing the perfectly elastic supply curve to become inelastic, and thus resulting in a surge in the prices of raw materials. The middle class however, will be spending their money to buy the new equipment or to buy raw materials to craft the equipment for their new classes, and thus will be spending more money than earning in this time period. Many of the people in the rich class too will be losing money as they will aim to give their new classes the best equipment, and becomes a heavy consumer instead of supplier in the weapon’s industry.
With an increase in the income of the poor, they will start to demand more normal goods and less inferior goods, while the middle class, despite being poorer, will still have enough to get by with normal goods and they will be unlikely to move down to inferior goods. This will lead to an increase in demand for normal goods such as angelic blessings and androids. As mentioned in my previous chapter, since angelic blessings are supply inelastic in high demand, the prices are likely to soar, and thus it will make a worthwhile investment.
Apart from that, new and valuable items will be able to be crafted. Items such as flames and cubes will be able to be crafted, and the best part is, they will be tradable. Flames are created through the materials obtained from new and special flowers and stones, so for those who are looking for fast mesos, get your herbalism to level 10 and prepare a golden shovel for RED patch. Now let’s talk about cubes, who cares about flames when all your items already have all stat + 3% additional option?
Cubes on the other hand, are extremely important in defining a noob and a pro weapon. After RED, the cube market will present a superb business opportunity, not only because they can be traded after being crafted, but because one of the key materials is easily available right now, and I predict a 4 fold rise in prices of it. So, what is this key material? Here it is.
Why is it that suspicious cubes will be worth so much after RED? The reason is that suspicious cubes, when put into a cube extractor, will have a 25% chance of obtaining 5 cube fragments, or 75% chance of obtaining 1, whichever option you choose (of course the former will result in higher yield, but it is absolutely situational). These cube fragments are essential in the crafting of meister or artisan cubes (The new craftable and tradable cubes), and thus they will be highly sought after, causing a sharp increase in demand. Suspicious cubes are moderately inelastic, as the drop rates are low and you can only kill most bosses that drop it once a day, and thus the prices of them will definitely soar after RED.
The next part of this chapter would be explaining on cross price elasticity of demand, and how analyzing it will potentially lead to correct investment choices in Maplestory. What is cross price elasticity of demand (CPed)? CPed measures the responsiveness of demand for good A following a change in the price of a related good Y.
Let’s take 2 examples, chicken rice and duck rice. Having a CPed of 0.5 (positive) would mean that if the price of chicken rice were to rise by 20%, the demand for duck rise will rise by 10%. This is due to chicken rice and duck rice being substitutes, and the average consumer wouldn’t mind eating either.
2 important terms involved in cross price elasticity of demand would be substitutes and complements. Real life examples of substitutes would be coke and Pepsi. If the price of coke were to increase, people are likely to switch to drinking Pepsi because Pepsi is not much different from coke, and thus is a substitute. In other words, an increase in the price of one good will lead to an increase in demand for a rival product. An example in Maplestory for substitutes would be for xenons, in which they can equip both equipment meant for pirates or thieves. If there were a sudden surge in prices for pirate equipment, they could always switch to wearing thief equipment, causing a decline in demand for pirate equipment and an increase in demand for thief equipment.
On the other hand, complements are things that are in joint demand, and when there is a strong complementary relationship between two products, the cost price elasticity will be highly negative, with an example being game consoles and software games. If the prices of game consoles were to rise by 20%, this would lead to a drop in both demand for game consoles and software games, as one is pretty much useless without the other.
So, how does understanding cross price elasticity of demand help you to understand the Maplestory economy better, and in turn profit? Here is an example of a very recent incident. The release of the permanent content, Running Attack, allowed people to get Dark Angelic Blessing recipes easily. However, these recipes are useless without the raw materials needed to craft the final product, mainly 20 Luk crystals, 20 Wisdom Crystals, 20 Lidiums, 10 Superior abrasives, and 10 Superior item crystals. The supply for superior abrasives is perfectly elastic, due to them being able to be bought from the NPC at ardentmill, while the supply for superior item crystals is relatively elastic too. Luk crystals, Wisdom crystals and Lidiums have the same rarity, and thus I will just be talking more about Wisdom crystals since it would also be applicable for both Luk crystals and Lidiums.
With the sharp increase in supply of Dark angelic blessing recipes (DABR) due to running attack, the prices of DABRs dropped heavily, and thus they were easily available to the middle class who wanted to craft their own Dark Angelic Blessing ring. Furthermore, many of the middle class earned the recipe themselves by diligently playing running attack, which rewarded you with the recipe after playing it for quite some time. With an increased supply and lower prices, the demand for DABRs shot up, and many people were interested in crafting their own Dark Angelic Blessing ring, either to equip it or to sell it. Since recipes (Most recipes are one-use in Maplestory, meaning that once you craft the item, you will need to get another recipe for the same item) and raw materials are complements, an increase in demand for either party will lead to an increase in demand for the counterpart. One thing to note however was that despite the supply for DABRs becoming more elastic, the supply for Wisdom crystals still remained inelastic, and thus when demand rose for DABRs, the prices of Wisdom crystals shot up as well due to the increased demand. To be exact, the price for Wisdom crystals was 4m each before the release of running attack, 5m about 1 day after the release of running attack, and 15m one month later. Sadly, I was unable to capitalize on this situation as I had not predicted the rise of the prices of the Wisdom crystals earlier on. If a person with extremely powerful spending power were to realize that wisdom crystals was a good investment, he would have bought out the whole market, obtaining monopoly of a “necessity”, releasing his stock bit by bit and slowly jacking up the prices, to possibly 25m today, increasing his amount of mesos invested by 5 fold.
A simpler example of complementing items would be the set effects of Cygnus equipment, whereby equipping all 6 items from the Cygnus set would give a very powerful bonus. Thus, a decrease in price of an item from the Cygnus set would result in not just a higher demand for that item itself, but also for the rest of the other 5 items. Despite each item by itself being outclassed by another available item (such as Cygnus gloves with Upscale dimension gloves), the set effect makes each item complementary to each other, as they are optimally used when brought together.
End of Chapter 5
Click above for Chapter 6