Saturday 24 September 2022

The determination of Price and Golden Price in economics.

 What determine the price of goods such as shares, gold, crypto, property, arts, and food and what is the golden price? 


Price can be affected by:

1. Intrinsic factor, Pi

2. Rarity due to aging, Pa

3. Seasonal, Ps

4. Random, Pr.

5. Discount, Pd. 

6.Confident index, Pc


Seller Price = Pi + Pa +Ps +Pr + Pc - Pd. 


The price of a stock depends on the intrinsic value of a stock, seasonal depending on the trend, random event such as war or act of god, confidence in the economy and the discount the seller willing to give. However stock is not affected by year of aging unless it is a derivative or no more of a going concern. 


Gold on the other hand is depending on intrinsic factor, seasonal trend, random event such as war or act of god, confidence in the economy and discount based on fluidity.  Ages does not much affected the price of gold as gold is a generic product in nature. Unless it is a limited item that will increase over time. 


While, crypto depend on the intrinsic factor or application, seasonal trend, random event such as war or act of god, confident index and discount based on number in circulation or rarity. As crypto is generic in nature, as one type of crypto is the same as the other, due to adherence digital in nature and hence not affected by aging.


Next, property depend on intrinsic value which is location, seasonal trend, random event such as war or act of god, confident in the economy and discounted based on the availability of credit or motivated seller. Property will rise with time as properties are scarcity in nature. 


On the other hand, arts have intrinsic value depending on artist or creator as well as rarity, aging due to years, seasonal trend, random event such as awareness on the art or confident in the economy such as act of god as well as availability of credit and discounted based on motivated seller.

Food will have intrinsic value as it is a necessity to live on, seasonal trend such as festivals, random events such as war or act of god, confident in the economy as well as availability of credit as well as discounted to due to perishability over time.


Cars will have intrinsic value as transport and branding, random event such as war or act of god, confident in the economy and availability of credit and discounted based on condition and ageing parts over time. 


Golden price refer to a ceiling price, whereby, buyer is not willing to pay for the product at a higher ceiling price depending on affordability and availablity of credit. As a things is worth how much a buyer willing to pay. 


Stock can be hundred, Gold can be ten thousand, Crypto can be hundred thousand, arts can be millions, property can be ten of millions. Cars can be hundreds of thousands and food can be hundred.


Bless day ahead. 


Regards, 


Dr. Lion. 












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