Gold can be produced by selling items through the Market or by taxing your current population of each city.
Taxing population
There a number of considerations when thinking about cash flow.
There is no such thing as overpopulation.
Tax is applied to your current population whether they are working or not.
Tax negatively affects happiness.
Taverns positively affect happiness.
Happiness affects population levels.
You need spare population to convert into troops.
Happiness = 100 – Tax rate + Tavern level
Population = Max Population * happiness / 100
Gross Income rate = Population * Tax rate / 100
Net Income rate = Gross Income rate – cost of Knights.
Because there is no overpopulation and you receive tax from unemployed people, max out your cottages.
The best population versus tax rate is when happiness equals 50, so tax accordingly based on your tavern level.
If however you want to train troops, drop the tax rate to allow happiness to increase to the desired level based on the equations above.
Final thing to note is to use the ‘Increase Gold’ button inside your castle every now and then, (I recommend every hour or second hour). The cost to happiness is impermanent and won't damage your city if it is set up correctly.
Be aware that if you have a lot of gold and are attacked, you run the risk of being farmed.
Selling Goods
Making gold from markets is not only possible but a very good practise but to do this you will need your cities to be in separate provinces.
A Kingdoms of Camelot realm is split up into a number of provinces and each province has its own market.
When you are building your second, third or fourth cities you should place them sufficiently apart to leverage the different markets found in different provinces.
What this means is that you can purchase goods in one province and then sell the same goods in a different province for a profit.
Purchase using City one which has a bargain good. Sell at City two which has the good at normal or enhanced rates.
There is a 5% tax on both buying and selling which needs to be factored in.
Knowing this, we can write the equations below:
Q = Quantity of Good
PA = Price paid per good
PB = Price received per good
FA = Fee to purchase from market
FB = Fee to put up on market
Market tax rate = 0.005
CA= Cost to purchase from market
CA = Q * PA + Q * PA * 0.005
CB = Cost to put up on Market
CB = Q * PB * 0.005
Return = Q * PB - CA – CB
When return = 0,
PA + PA * 0.005 = PB - PB * 0.005
For return > 0,
PA + PA * 0.005 < PB - PB * 0.005
Use the final calculation to determine if the sale is going to worthwhile. When the quantity is constant and you know the Price paid per good you can determine what your minimum Price received per good should be. If the side with the PB’s work out less than the side with the PA’s then you are going to be working at a loss and the sale is not worthwhile.
Related
- gold (other descriptions of gold generation there too)