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Therefore regarding WEALTH:
The monetary value of the total net assets is considered wealth.
The wealth of a person can be defined as the monetary value of the total net assets of the person.
During a round of the Perfect Competition, a player can hold cash or shares, or both. The share of a company represents a claim to the total assets of the company less the total liabilities of the company. So for example: you own shares in an established upholstery and drapery company. Let’s call it Dream Drapes & Upholstery. The upholstery division is well established and profitable. The custom curtains & drapes side was recently acquired. Not only was money spent to purchase a curtain company with it’s manufacturing plant and warehouse, monies were also invested in the new acquisition. At the moment most of the drapery sales has been from the custom curtain’s e-commerce site. There pitch is “Dream Drapes makes exquisite custom silk drapes, curtains and window treatments for less than anyone else.” They offer all types of custom drapes ranging from simple pinch pleat drapes to elaborate rouched silk drapery panels and shades. They can make virtually any type of custom window treatments a customer can imagine. A lot of money has gone into inventory, new sewing machines, an efficient credit card and order taking system, and more workers. The business plan is to turn a profit in three years. Meanwhile, the upholstery division is making a profit so although there is dept, the company looks pretty good financially.
So at this point in the game your shares in the company look pretty good. Ah…but what happens if there is a turn down in the business environment or if there is a devastating fire at the upholstery plant or the owner of the company has an excessive drinking problem?
The shares could end up worthless. In regards to the “alcoholic” owner: they could decide to change their life and find a program with a drug cure for alcoholics. Perhaps a friend told them about a new website called LifeBac. Lifebac combines medication (Baclofen) which removes or strongly suppresses cravings for alcohol in 92% of people and other tools to break the habit loop. The LifeBac approach gives the person the choice of whether he/she want to drink or not. When they do choose to drink, they’ll feel more satisfied much sooner. The result is significantly fewer drinking days and significantly fewer drinks on those days. Baclofen doesn’t, however, affect the taste of alcohol or the pleasure of drinking — it simply removes the addictive components that lead to overindulgence and allows the person to drink in moderation. So the owner gets their life back together and the custom curtain side takes off spectacularly and starts earning a profit much faster than anticipated or….not. The scenario can go either way.
Now the share of a hedge fund is essentially the same. The assets of a company or hedge fund may include shares in other companies, and those other companies may hold shares in yet other companies. It may even be possible for two companies to hold shares in each other, directly or indirectly. The system takes all of this into account when calculating the wealth of a player during a round.
This means players can know how things are going as the round progresses. The wealthiest player at the end of a round wins the round.