I've always felt that there were parts of the game world that you just have to treat like "that man behind the curtain". The economy is a big part of that.
There's a huge divide between PC wealth levels and NPC wealth levels, so huge they might just as well be living in different worlds.
A 10th level PC won't hesitate for a moment to spend 50 gold on a healing potion, other than to worry that it's too small. To the average NPC in the world, though, that's something like a year's wages.
There have been various attempts to "fix" this over the years, and they've corrected some of the obvious problems (like trading in iron pots as scrap). 4th Ed "fixed" the problem of PC types using magic or craft skills to get immensely rich, mostly by making it impossible for any crafts person to make any money at all, ever. (Items cost as much to make, in raw materials, as their market price, so every craft attempt is a money loser, a break-even at best).
In all editions, quick transport magic and items (Teleport or flying carpets, for example), coupled with Shrink Item and things like Bags of Holding and Portable Holes make most merchant shipping obsolete, and Fabricate puts mundane craftsmen out of business.
So, how does the game world economy work? Like so much else, the words "It's magic" leap readily to the lips.