The Economics of Prophecy

"I make money with a new treat called French Toast. French toast can be made with bread, eggs, milk and sugar, and honey. Use this as the raw material. The raw material shall be ten copper coins per piece of French toast. Buy ingredients with 10 copper coins, bake French toast and sell for 20 copper coins. What will become of this basic form of commerce?

I pulled in the silver coins and left ten of the copper coins to the right of the frying pan and 20 of the copper coins to the left. Two thousand yen a piece of French toast is the price of conscience. If honey isn't our standard, we might need silver coins.

By the way, anyone in this world or a city dweller can do as much as add up. Multiplication is also done by many humans. Ninety-nine will be treated like masters though.

"10 silver coins... not 10 copper coins, do you make 20 copper coins...... But you can't just make ingredients."

Alfina took the look into questionable form. Except that I couldn't recognize the unit of copper coin for a moment. Over the past three days, Meer has planted the price of what is needed for commerce. It was an explanation to say how much money would blow off honey if I broke it. I was surprised by the price of paper and cloth is new to my memory.

"That's right. It actually costs places, firewood, a frying pan, etc. And, of course, the cost of baking French toast for me to live. If you take this as five copper coins, it is the nature of this business to earn twenty copper coins with fifteen copper coins. What we're selling is French toast, but it's actually about money and money."

Alfina compared the remaining French toast and copper coins in the frying pan.

"I could feel it just a little bit. But that's a little scary."

That's right, it's replacing all the value with money. The possibilities and limitations of measuring with money, we must first make them understand the former. I'm not talking about reality, because the former is much easier.

"The cost, however, varies greatly depending on the number of products sold. The easiest thing to understand is the cost of the place. Suppose the rent to rent one store is three silver coins a month. If you only sell one piece of French toast a day, the rent per piece of French toast will be ten pieces of copper coin"

I added ten pieces of copper to the right of the frying pan.

"If the material cost is 10 copper coins and the place cost 10 copper coins, then 20 copper coins. There are other costs, so you lose money."

"Yes, but if you sell ten pieces of French toast a day, it goes down to one piece of copper coin per piece. Eleven copper coins for this. If you also make a lot of firewood, it will be cheaper because all you have to do is make it less wasteful. Commercial means that the larger the size, the lower the cost per product."

Except for nine of ten copper coins.

"Assuming that the cost of materials is ten pieces of copper coin per sheet. Expenses such as rent, and three pieces of silver coin for me to live together shall be nine pieces of silver coin in a month. When you think you can sell out 10 sheets a day, the cost involved is 10 sheets of copper coin, 10 sheets of copper to be hung, a total of 3000 sheets of copper coin to be hung in 30 days, and 900 sheets when expenses are converted into copper coins. You need 3900 copper coins before you can start doing business. This is the average Wangdu citizen's cost of living for a year."

"I work desperately to save 3900 copper coins and start doing business. Profit is 6,000 copper coins because ten French toasts can be sold for thirty days and 20 copper coins. I mean, I turned 3900 copper coins into 6000. You will have made 2100 copper coins. That's more than half a year for the average citizen."

"Business is amazing."

Alfina looks at me like she's impressed. Come on, the golden treat I was eating happily earlier would have looked like a silver coin, though I can't afford it. But it doesn't get any sweeter from here on out.

"But before me, who makes a lot of money and is a know-how, stand-up enemies appear."

I'm talking about a fight in the name of business. I saw Meer.

"Then Meer is the rival merchant. What do we do?"

"You just have to crush the senior store."

"Yes."

"What!?

Alfina is amazed at how Meer and I interact. You suddenly don't understand even if they say this. I mean, I'm scared of the understandable Meer. It's not a potential aspiration or anything.

"Cohon. Then I am the son of a great merchant. It's a pain in the ass I've been making a lot of money selling rare treats in Wang Du lately............, I hear about busty merchants. I'm laughing, pretending to be a guest, that French toast is going to be easy and profitable. Just in my pocket I have 39 silver coins, or a penny for 3900 copper coins. I decide to crush the busy little merchant and monopolize the profits. Now, what will you do?"

Meer pointed the water at Alfina in Norinoli.

"Oh well..., do you do things that are not good? Yeah, buying ingredients..."

Oh, you've come out a lot. Buying up materials. Speaking of which, Drefano hit you. It's not an ingredient, it's a kettle, and it was an umbrella chamber of commerce under umbrella, not directly.

"No, I compete only in a legitimate way. It is…… debt"

"Shh, are you in debt?

Alfina tilted her neck. I guess it's hard to understand that you're rich but you owe money. But the biggest advantage of being rich is being able to borrow. Modern planet, capitalist economic system, then business was a game of competing ability to borrow.

"I use 39 silver coins and my parents' credit as collateral to apply for debt. And we'll have 390 silver coins, ten times as much money as our senior stores. However, the interest rate will multiply by 10% a month, so the 39 pieces you have will be gone in a month."

Meer joyfully talks about the math that crushes Ricardo's shop. Alfina asks like she's been drunk.

"Now, I use ten times as much money to get a store three times bigger than my senior year's to hire three times as many people and buy tons of materials. And you sell ten times as many French toast as 15 copper coins."

"Ricardo's store has 20 copper coins for one, right? Ricardo, I know you're in trouble, but is that okay?

"Remember earlier, the bigger the business, the lower the cost per product, or cost. Even a store three times the size, the rent won't double. More importantly, this principle applies to those who sell me ingredients, and I can lower the cost of ingredients per piece of French toast to a much lower amount than my predecessors, five pieces of copper coin."

"Oh, is that so"

It's not a special strange assumption. For those who sell materials, the labor costs of a single transaction are ten times the same.

"Now let's compare the two businesses. Senior stores cost 13 copper coins per piece of French toast. My store costs six as well. I mean, the money per French toast is seven copper coins for seniors and nine for me."

"You're selling cheap, but you're getting a lot more money from Mr. Meer. But you have to pay the interest rate on your debt, right? Ricardo, you're your own money, so there's no interest rate."

Alfina is following properly. That's right, you think so. Debt is bad with loss. That's the normal feeling.

"Yes, but my profit is 3,000 pieces to be multiplied by nine copper coins, so it's 2,700 pieces a month and 2,700 pieces in silver. You can easily pay 39 silver coins, etc. which is the interest rate for a month. Come on, what do you want to do, Senior?"

"I have no choice but to reduce the price of French toast to fifteen pieces of copper. It's the same price."

"I'll cut the price to fourteen."

"Gu, thirteen."

I know I'm gonna lose. Keep fighting. There is sympathy in Alfina's eyes that look at me.

"Mr. Meer can cut the price more, right?"

"That's right. When the price reduction competition is thirteen copper coins, my profit is zero, and of course the cost includes the cost of living, so I can live. But Meer will relentlessly pull it down to twelve. Even when it comes to 39 interest rate silver coins on debt, it's just the cost of 1.3 copper coins per piece of French toast. Meer can secure profits by selling French toast for eight copper coins a piece. There's nothing I can do. No, on the contrary, the cost per sheet will increase from thirteen because I can't sell French toast in my store. If you sell it, you lose it."

That's what I said and put my hands up. I couldn't beat the rich.

"So, but wait. Then Ricardo, if you also owe money..."

"No one lends me money as a petty merchant, in case they find me, I can't borrow it at 10% interest rate on my credit. Of course, I can't afford 390 pieces of silver."

Bad end's done. Well, it's oversimplified, but it's probably not wrong. Is this still too sweet?

"That's what Ricardo thought."

Alfina swelled her cheeks. Point a complicated gaze at Meer. No, even if I get emotional there, it will get worse.

"This is another meaning of making money out of money."

I'll get back to theory.

"We think of the raising of money as a cost, just like the sourcing of materials. The interest rate on debt is its cost. In other words, Meer's business is………"

I rearrange the copper coins in front of the frying pan.

"It's about raising 390 silver coins, paying 39 interest rates, and turning that into 600 silver coins. In other words, you make more than 50% of the profits with the money you get from paying 10% of the interest rate. In other words, if you can make more than interest rates, debt is a force."

In this case, no matter how much money you make, you will not return the principal. Because funds borrowed at 10% interest rates continue to generate more than 10% of the profits. It would be more expensive to give it back. It's just like not killing a bird that produces more eggs than it feeds.

"By the way, if my senior store crumbles, I'll raise the price and make it more knowledgeable"

"Do you want to go that far?"

Meer clings to further reality. Alfina was completely frightened by the bad merchant Meer. Well, anyway, it seems to have been well conveyed thanks to Meer's imminent act. I was a little scared too.

"As it is, well, anyway, did you know that it is more advantageous to be able to have a lot of money available than to be able to make money out of it. Money in business is not about the level that it is better to have. If not, they will be destroyed."

"Yes.... it's like you're listening to military funds"

"That's the story. It's quick and helpful to understand."

No matter how quiet you are, the boulders are people on the trading side.

I mean, I guess Meer and Alfina are better geologists than me. Then let's get back to the reason we talked to such a good student who wasn't even on edge.