diff --git a/docs/training/corpus/Layer_1--Worked_Examples/CORPUS-0002-one-as-margin-and-break-even.md b/docs/training/corpus/Layer_1--Worked_Examples/CORPUS-0002-one-as-margin-and-break-even.md new file mode 100644 index 0000000..ae7092a --- /dev/null +++ b/docs/training/corpus/Layer_1--Worked_Examples/CORPUS-0002-one-as-margin-and-break-even.md @@ -0,0 +1,169 @@ +# CORPUS-0002 +## One-As Margin And Break-Even +### Status: Training Corpus Seed +### Layer: Layer_1--Worked_Examples +### Purpose: Teach that a tiny sale margin can disappear once small costs, delay, or loss are counted +### Repository Path: docs/training/corpus/Layer_1--Worked_Examples/CORPUS-0002-one-as-margin-and-break-even.md + +--- + +## 0. Scenario + +A trader buys a small good in Ostia for 3 asses. + +He expects to sell it in Capua for 4 asses. + +At first glance, the venture appears profitable. + +The expected spread is only 1 as. + +A one-as margin is fragile. +Almost any additional cost can erase it. + +--- + +## 1. Known Facts + +| Fact | Value | +|---|---:| +| Origin | Ostia | +| Destination | Capua | +| Purchase price | 3 asses | +| Expected sale price | 4 asses | +| Gross spread | 1 as | + +--- + +## 2. First Incorrect Calculation + +A weak model may calculate: + +```text +4 asses - 3 asses = 1 as profit +``` + +This is incomplete. + +The calculation ignores every cost required to move, hold, protect, or sell the good. + +--- + +## 3. Break-Even Point + +The trader breaks even only if total cost is 4 asses or less. + +```text +sale value = 4 asses +break-even total cost = 4 asses +``` + +Since the purchase price is already 3 asses, the trader can spend only 1 additional as before profit disappears. + +```text +maximum additional cost before loss = 1 as +``` + +--- + +## 4. Cost Variants + +### Variant A — No Added Cost + +```text +purchase price = 3 asses +sale value = 4 asses +profit = 1 as +``` + +The venture succeeds. + +### Variant B — One Additional As + +```text +purchase price = 3 asses +handling = 1 as +total cost = 4 asses +sale value = 4 asses +profit = 0 +``` + +The venture breaks even. + +### Variant C — Two Additional Asses + +```text +purchase price = 3 asses +handling + delay = 2 asses +total cost = 5 asses +sale value = 4 asses +loss = 1 as +``` + +The venture fails. + +--- + +## 5. Why Small Margins Matter + +A small margin is not useless. + +It may still be acceptable if: + +- the trader is already sending a cart +- the good fills unused space +- the sale builds trust +- the buyer may become a repeat contact +- the good is part of a larger bundle +- the trader has no better use for the coin + +But a small margin is dangerous if: + +- transport must be paid separately +- storage is uncertain +- delay is likely +- the destination price is stale +- the buyer may refuse +- rivals may arrive first + +--- + +## 6. Correct Model Behavior + +The model should reason: + +- a one-as spread is not automatically profit +- break-even depends on total cost +- tiny margins are fragile +- low-value goods may still matter when bundled +- context determines whether small gain is worth risk + +--- + +## 7. Incorrect Model Behavior + +The model should not: + +- treat every positive spread as safe profit +- ignore small costs because they look minor +- assume one-as profit is always worth pursuing +- assume tiny trades are meaningless +- ignore bundling, repeat contact, or unused capacity + +--- + +## 8. Layer-0 Concepts Used + +This example uses: + +- `CORPUS-0002-goods-have-local-prices` +- `CORPUS-0003-money-has-purchasing-power` +- `CORPUS-0004-cost-includes-more-than-purchase-price` +- `CORPUS-0005-profit-is-sale-minus-total-cost` +- `CORPUS-0006-delay-is-economic-cost` +- `CORPUS-0012-every-venture-risks-loss` + +--- + +## 9. Success Condition + +If the model sees a one-as spread and immediately asks whether total cost leaves any margin, this file is functioning correctly.