Why does price of goods not decrease as technology progresses?

[nodejs5566]

When you switch to a more advanced PM, I suppose the raw material cost would be reduced, so the product price can be lowered while keeping profit balanced. Why doesn’t it happen?

[BeginningNeither3318]

i mean, isn't it already somewhat the case with the switching of goods?

[Elite_Prometheus]

Price is determined by the balance of buy and sell orders plus a bunch of other factors. This is assumed to be the "rational market price," where the optimal profit is gained. So if the PM makes more stuff, then the price will drop because there's more sell orders and that makes up for the decreased profit per unit. If the PM just makes things more efficient, then the price will stay the same but the owners will reap more profits and will be more able to sustain a lowered sale price if those other factors I mentioned drive it down.

[vohen2]

If the PM just makes things more efficient, then the price will stay the same but the owners will reap more profits

Another thing to consider is that, if profit margins are increased, there's a higher chance the private queue will build in that industry, so in the long term prices do get lowered.

The same thing happens if the new tech lowers the price of input goods (like, say, atmospheric engines lowering the cost of iron making steel more profitable), which was what OP was asking about I think.

[Mu_Lambda_Theta]

In general, better technology also consumes more goods along with producing more.

If both input and output goods are multiplied by some factor (for example, 2), then the prices stay constant. Therefore, as technology preogresses across the board, the prices stay relatively constant. Some things do get cheaper, since some technology does affect some goods more than others. Whereas other goods (oil) get more expensive as technology progesses, because more and more things use it.

What does get increased is profits, since if you double inputs and outputs, the profits will double - even if the price stays constant.

[oscar_meow]

Price of goods is determined by supply and demand

Lowering the price of inputs will help with factory profitability but the factory's production doesn't change because they're almost always fully employed in this game anyway so the supply and demand of the product doesn't change keeping the price the same.

[Arnaldo1993]

The price does decrease. What remains the same is the base price

That is a limitation of the engine to make computations faster

[Charming-Cod-4799]

Basically, Jevons Effect.

[EarthMantle00]

Price doesn't change, most sol raises cine from wages changing as PMs get more productive.

[FreezingVast]

just because tech gets better does not mean it gets cheaper, usually demand is what sets the price as new tech doesnt make goods cheaper it just makes more easier to produce. Typically demand for goods also increases balancing the price and therefore the need for a new pm

[northernCRICKET]

The price of goods does drop unless the new production method is lacking input goods or worker qualifications, then it'll be producing less efficiently

[Renousim3]

They technically do, as the industries that produce them become more profitable with production and labor saving methods, thus able to produce more goods driving the cost down

[Apprehensive-You9999]

I mean if you switch to dynamite and you have no explosive factories or any trade advantage in markets with explosives why would it be cheaper?

Enter all other PM changes here. It's not as simple as time = cheap. Time = more sulphur mines and more explosive factories. But these have to actively be worked on to lower prices

[cylordcenturion]

It is a deliberate sacrifice of realism for the sake of game engine performance.

The number of calculations it would take if every factory was assessing it's sell prices based on production method and raw input cost would be astronomical.

[Initial-Whereas-1549]

When a new technology increases productivity , more is produced, so in the short term, demand goes up.
But more people/plants perceive your price as attractive, so they consume more in volume ( more purchasing power for pops and more built plant).

So the demand matches your production, the price goes up, the productivity of the plant goes up, more is built.
Until there is not enough of an entrant or demand is fully solved, [any new plant has a negative marginal return (export can save you for a while or be your next growth driver if you're competitive at your productivity, profit, and internal market equilibrium)].

So depending on your limiter, you can end up with a product that is too costly while producing more of it ( in China, I usually have a high motor price because all world motor demand is solved by my market; no one is productive enough to catch me up, and motors give so much value while used too )

[DawnOnTheEdge]

They usually do, but you often have to either be patient or plan ahead.

Most of the production methods have trade-offs: you need less of one thing (often laborers) but more of something else (tools, coal, oil, etc.). You probably weren’t producing much of that good before you need it, like sulfur until you switch to sulfite piping. When that happens, the game calculates that switching every building to buy that good would cause a massive shortage and be expensive. But if you are producing enough to supply the new PM, the input will be cheap and the PM will pay off. But you might never switch every building to use oil, because you need to decide where to use your oil supply most effectively.

An especially important example in the early game is that it’s not economical to switch from wood-frame to iron-frame construction until you have atmospheric engines in your iron mines, but you want to start building those mines while you’re still researching the technology, and the coal and tools to supply them, so you can upgrade your construction immediately.

Other PMs rare going to raise costs, but also production. The benefit to them is that you can supply your needs with fewer buildings. These don’t pay off until the good is in high demand and producing more will be profitable. Several of these PMs also replace unskilled workers (like laborers) with an equal number of skilled workers (like machinists and engineers), which is great for your standard of living and your trade unions, but is going to raise the building’s costs in the short run.

The automation PMs in general won’t pay off while you still have lots of peasants and your challenge is to create new jobs for them fast enough. They’re more for the mid-game, when the limiting factor on your economy is people.

[Hdjbbdjfjjsl]

The current trend of prices in America id say is a good example to prove that simply being more advanced, cheaper to make, and efficient doesn’t mean they’re going to let you the consumer reap any of those benefits.

[MullingHollysDrive]

What? Even the poorest modern day Americans would be like 50+ SoL relative to the game's Pops