Economics 7 Week Challenge Series – Challenge 6: Buying and Selling...

Hi Everyone,

Welcome to the final week of the Economics 7 Week Challenge series for 2022. We begin this week with the results post for Challenge 6: Buying and Selling Game (Original Version). This post contains a video generating the results of the challenge using a Microsoft Excel Model.

Winner determined in this video

What is the Buying and Selling Game?

For the benefit of those who have not entered this challenge nor any of the monthly contests, here is a brief explanation of how the game is played.

Participants are required to buy goods with an allocated amount of money. They are given a choice of 6 goods and all these goods are available in any of the 5 towns or cities in the game. The buying prices of all goods are provided in the question.

The participants are then required to sell all of their goods on a future date. The selling prices for all goods in all towns or cities are not provided. Instead, the question provides a triangle distribution for the selling price of each good in each town or city. For the triangle distribution, the minimum, maximum, and mode values are provided.

The participant who has the highest profit after selling all his or her goods is the winner.

Responses to the challenge are made in the comments section of the challenge post. If several participants make the same profit, the person who entered (commented) first wins. The total prize for this challenge could reach as high as 60 Hive. The number of participants determines the value of the prize. For every entry, the prize is increased by 5 Hive (e.g. if the challenge has 9 participants the prize will be 45 Hive (5 × 9)). The winner will receive 2/3 of the prize and second place will receive 1/3. In addition to the prize in Hive, the winner receives 20 points, second place 10 points, and third place 5 points; these points contribute to determining the overall challenge series winner. The most profitable buying and selling price combination is also calculated. If the prize is below 60 Hive and the winner adopts this strategy, he or she will receive an additional 5 Hive.

The format of the required entry is explained in detail in the challenge itself.

For a more detailed explanation, you can access the challenge post using the following link.

Other challenges

There are six other challenges in the series. Unfortunately, all of them are now closed. See links below.

Results of Challenge 6

Table 1 contains the selling prices generated by the ‘Buying and Selling’ Game model for each dessert in each town or city.

Table 1: Selling prices of all desserts in each town or city

Table 2 contains responses and the profit made by each participant.

Table 2: Participant responses and profit

Three participants achieved the same highest profit of $15,191. They were @pana1, @pasiflora, and @maro1. The winner of challenge 6 is @pana1 for entering first out of the three. @pana1 wins 40 Hive (60 × 2/3) and 20 points. In second place is @pasiflora for entering second out of the three. @pasiflora wins 20 Hive (60 × 1/3) and 10 points. In third place is @maro1 who is awarded 5 points.

@pana1 won by buying 4687 pancakes for $3.20 each in Cream Falls for a total of $14,998.40. Then went on to sell these pancakes at Syrup Hill for $6.441 each; thus, earning a revenue of $30,188.97. Therefore, made a profit of $15,191 ($30,188.97 – $14,998.40).

Highest possible profit

The strategy that would have generated the highest profit would have been to buy 6000 Mousse from Syrup Hill at $2.50 each and then selling them at Icing Town for $5.192 (as generated by the model) each. This would have generated a profit of $16,152.

Table 3 contains the lowest buying prices, the highest selling prices and the highest profit for selling each type of dessert.

Table 3: Lowest buying price and highest selling price

I would also like to thank @crrdlx, @fatherfaith, @micheal87, @adeyemijan, @emeka4, @temileke, @alexkidding, @seki1, @notak, @homesteadlt, @axel-mccornstack, @adedayoolumide, and @adeyemi12 for participating.

Race to become the Challenge Series Champion

After six challenges and with just one challenge left to announce, the overall scores for the Challenge Series are as follows.

Overall Series Score

Position	Participants	Points
1	Pana1	75
2	Fatherfaith	65
3	Adeyemijan	60
4	Adedayoolumide	50
5	Temileke	30
6	Homesteadlt	20
7	Emeka4	10
8	Pasiflora	10
9	Joshsticks28	5
10	Maro1	5

This table will be updated in every results post.

Tips for future games (If you want to participate in the Buying and Selling Game monthly contest series, I strongly recommend you read this section of the post)

To achieve the best chance of winning the game (i.e. earning the highest profit). Participants need to make the best use of the information they are given. The participant should buy from the place that sells the good at the lowest price and sell at the place that will offer the highest price.

To inform the decision further, participants should also consider the mean and median prices for each good in each place. The mean and median for a triangle distribution can be calculated using the following formulae.

Mean = (Minimum + Maximum + Mode)/3

Median when Mode ≥ (maximum – minimum)/2 (i.e. mode closer to maximum)
Minimum + (((maximum – minimum) × (mode – minimum))/2)^0.5

Median when Mode ≤ (maximum – minimum)/2 (i.e. mode closer to minimum)
Maximum - (((maximum – minimum) × (maximum – mode))/2)^0.5

Proof Median

If you want to read any of my other posts, you can click on the links below. These links will lead you to posts containing my collection of works. These 'Collection of Works' posts have been updated to contain links to the Hive versions of my posts.