Whereas, if the same iron ore was either harvested or created by players, the market can determine the price of the ore, which can then affect the price of the item. But the difference here is that players are establishing the value of iron ore through supply and demand. Therefore, the price of iron ore can raise or fall which also means the price of products that uses iron ore could also raise and fall.
This is important because if price controls are set too high by the NPCs then the items crafters make may end up being too expensive for players to purchase. The best way to correct this is to create massive inflation to cheapen the costs of the materials that are sold only by NPCs. Of course though, with inflation the costs of materials and products that are either harvested or crafted by players will rise in price and cancel out the positive gains that minimizes the effect of the price controls.
So what’s the solution? Don’t have NPCs selling goods or even purchasing goods. Let all materials even those grey or white items that are used to craft goods either be craftable by crafters or lootable by adventures and tradable on the open market. Let supply and demand determine the value of all goods in the game.
Why? Because supply and demand are the best indicators of providing market stability and trying to alter one or the two usually ends up with negative consequences. For an economy to be strong, the economy needs to be free, therefore; NPCs should not participate in buying and selling goods otherwise they will simple distort the market causing negative affects towards supply and demand. At the very least, one must always remember a free economy is a key to economic and player freedom.