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<H3><A NAME="s4">4. Trading</A></H3>

<H3><A NAME="ss4.1">4.1 Buy low, sell high</A>

Being a profitable merchant in Merchant Empires is not difficult.  All goods
will fetch a higher price at a neighboring port.  Being a highly profitable merchant
requires balancing a number of important pricing factors:<br><br>
(1) Personal relations.  The merchant's personal relations to the government that controls
the port of sale affects the pricing of goods.<br>
(2) Global relations.  The global relations of the merchant's race and the race of the
controlling government also affects pricing.<br>
(3) Distance from availability.  The distance to the closest port that offers the good
is an important pricing factor.<br>
(4) Supply and Demand Index.  See below.<br><br>
Personal and global relations have a direct effect on the amount of profit that a port
attempts to receive.  As your relations increase, the amount of profit that the port seeks on
a given trade decreases.  This means that your bargaining power will also decrease as there is less
difference between the price that the port offers and the price below which it will not
do business.  As your relations increase, your bids will have to be closer to the offered price.

<H3><A NAME="ss4.2">4.2 Hierarchy of Goods</A>

First level goods:<br>
(1) Biochemicals<br>
(2) Food<br>
(3) Ore<br>
(4) Precious Metals<br>
(5) Slaves<br><br>

Second level goods:<br>
(1) Textiles<br>
(2) Machinery<br>
(3) Circuitry<br>
(4) Weapons<br><br>

Third level goods:<br>
(1) Computers<br>
(2) Luxury Items<br>
(3) Narcotics<br><br>

<H3><A NAME="ss4.3">4.3 Supply and Demand</A>

<P>Every good has a supply and demand index.  This number directly affects the
price that the port is willing to offer for a good.  As a good is purchased by
a port, and the supply increases and the demand decreases, the price that the
port will offer for the good also drops.  Inversely, as a port sells more
of a good, the price that it charges rises as the port's supply of that good decreases.
Over time and/or with the trade of lower ranked goods, the supply/demand index
of a good will increase.<br><br>
A frequently used strategy is to trade in lower ranked goods long enough to increase the
supply/demand index of a higher level good, thus increasing profits when your merchant switchs
to trading in the the more lucrative higher level good.

<H3><A NAME="ss4.4">4.4 Upgrading Ports</A>

<P>If a sufficient amount of goods is traded at a port, the port has a chance of
being upgraded or gaining a level.  An increase in a port's level brings an increase
in the port's ability to defend itself.  In the event that port is raided, higher level ports
will contain more credits.  When a port is upgraded, there is a chance that it will begin
to trade in a new good.  Ports must be level 5 to trade in the third-tier goods.  If traffic
at a high level port decreases below an amount that is necessary to sustain it's status, there
is a chance that it will downgrade to a lower level.


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