In theory, this is pure economic theory, TF2 is an almost perfect market. The market has no costs in trades, there is no transport cost, there is no missing information- anyone anywhere can look for other trades, there are no barriers to entry (bar premium I guess), everything should be ideal.

This is going to be a lot of generalisation and the examples aren't perfect but the logic is sound. In this perfectly competitive market if there are 3 sellers of a good, say an Attendant and one advertises for 3 ref, on for 2 and one for 1 the only one who can sell it is in theory the 2. The 1 cannot sustain selling in the long run, if he continued to sell like this he wouldn't be able to cover the cost of creating the hat, either by random drop or by crafting from refined, it would be totally unsustainable. The 3 would never sell it because the 2 exists and why should any one buy for 3 when they can for 2. In a perfect market price is forced down to the lowest average cost in the long run.

If people are selling keys for higher, why should key prices rise if Demand is increasing? Demand is perfectly elastic. An upwards shift in the demand curve would mean more sellers enter the market and the average cost is forced up- has this been happening? As I see it the key sellers are the old hat sellers, those who have the stocks to sell- entry barriers have been creeping in and the market has become an Oligopoly with bigger sellers controlling the price. But in Oligopoly the price should be stable because if one seller reduces price he loses out in the long term and if he increases he won't selll anything- this is because of the kinked demand curve- if you want to understand trading properly, go learn economic theory- the only real explanation is collusion.

Not overt collusion mind, this, if anything, is tacit, quiet, collusion. People are able to force price up because everyone else is- if one other seller increases price every other one follows suit because they do not stand to lose from it. One of the best explainations of oligopolistic markets is through using game theory- funny how tf2 trading is a game too. Every player in a game has a dominant strategy based on what the other player does, in noughts and crosses, tic-tac-toe to those over the pond, when my opponent makes one move it is ideal for me to make a response that stops him winning and makes it easiest to win, this is simple logic. In an oligopoly there aren't spaces on a board but decisions about price- keep it the same, lower it, raise it. If the dominant strategy is to increase price then price will rise, even if it is inefficient in the market to do so. Unfortunately there is little to do besides regulate the sellers- something I doubt Valve will do as greater key circulation only means more keys are bought from the mann co store- they all came from there once. The way i see it, people are lowering the price of the refined metal just so they may get more of a profit on they're own sake without any regard for how hard it may be for new players, poor people, or just people who don't want to spend money. Honastly, 10 refined is way over the line for 1 key, it isn't worth the trouble of even going through to get the metals to make a hat for little to no profit at all. My suggestion, bring the price of a key back down, give everyone a chance and don't let greedy people make profits just because they want too, Thank you for your time.

In theory my friend, in theory...

Also i love how alot of you just comment without even reading

like anybody would even dare to sell at 7 refined when the price is allready skyrocketing to 10 refined, it would be an obvious lose in profit, people are to scared of a good change

if you read it you would find proof, instead of just automaticly searching for links, learn to read