This guide may not 100% accurate as this is viewed from my own personal perspective.

Also, I will use Microeconomics in this guide.
However, TF2 is a game so the microeconomics rules may not suitable to measure true supply and demand for TF2.

If there's any mistakes I made in this guide, I apologize for it. You may leave your feedback in the comment section below, I'll appreciate every feedback given!

These are some of(if not all) factors that affect the key price.

1) Major updates
Major update introduced a lot of new cosmetics or action items. Usually when these update were newly introduced, the availability will be very low.

As a result, people will tend to buy key to open crates in order to get the new cosmetics. This will cause the demand of key surged and the rise of the demand will force the key price rising.

2) No economic control policy
Team Fortress 2 is a game not a country, Valve is not the government for the TF2 citizens. Simply said, Valve never wants to interfere TF2 economy. Usually, when a country's inflation or deflation rate went out of control, the government will introduce some ways to stabilize the economy by limiting the maximum or minimum price of an item.

No control = free economy = uncontrolled inflation & deflation

Be expect that the key price will went up uncontrollably because of this.

3) Demand < Supply
When the quantity demand for the key were higher than the Supply, the price of key will rise. Sudden increase in demand will cause excess demand and the price of key had to be increased.

Benefits
1) The increase in key price cause some user's item price increased. This makes some item became more expensive and increase the user's backpack value.

It is like owning a property in real life, let's say you buy land for 200k. The inflation caused the price of land increased, in future the land you bought became 300k.



Disadvantages
1) The rich people became richer because of the key price inflation, while the poor became even poorer. Those who owned keys will became richer because the key price keep increasing, those who didn't own keys might became poorer because the increase in key price caused some item became more expensive and some became deflated. Also, the inflation rate caused them unable to buy key easily.

2) Not all item gain benefit from inflation
Sometimes we buy the item that worth 1 key price and expect it to gain benefit from key price inflation. However, sometimes the key price inflation doesn't make our item price go up. Sometimes, it makes them go down, the item we bought became not worthy anymore.

3) Burden for new traders
As the key became more expensive, new trader are now much harder to buy their first key. This makes them much harder to buy other stuff.

P = Price
Q = Quantity
Qd = Quantity demand
Qs = Quantity supply
E = Equilibrium

So let's say this is the graph of old key price.
P0 is the old price of the key(2.55 ref) and Quantity demand for it is Qd(because we don't know the exact amount of demand). The point of equilibrium will be located at E0. This is the point where the price and quantity demand is the most appealing for the sellers and buyers.

The price of key increased over the years due to increase in demand for keys. The update introduced new crate which contains new cosmetics and new unusual effects, as a result, the quantity demand for key has increased. (Let's not forget that there are other contributing factors that will affect key price)

As a result, the graph will be changed to this.

Let's say this is our current key status(as of November 4th 2016).

As the demand for key became higher(D0D0 to D1D1), the new equilibrium of balance will be changed(E0 to E1) as a result, Quantity demand increased(Q0 to Q1) as well as the price of key increased(P0 to P1).

Honestly speaking, there's no solution or fix to controlling key price. Don't expect Valve will interfere the TF2 economy.

When I browse though the guides, I've saw a lot of people giving feedback about current TF2 economy and way to overcome the inflation. I will try analyze these solution see if it is worth it or not.

1) VOTE FOR 2.33 REF KEY PRICE ON BACKPACK.TF
Community's response toward this kind of 'solution'

Nope, this way definitely won't work, trust me.

2) Valve should interfere economy
Most likely not possible. Valve's job only update and fix the game, they will not interfering the economy. This is because TF2's economy are invented by the community themselves not Valve themselves.

If Valve themselves are the one introduced the economy, we might able to expect Valve interfering the economy.

3) Make Key became craftable
This help reduce the key price but unfortunately it's not going to happen, this solution may lead to other serious problem in a long term.

The reason why I said it's not going to happen it's because it basically makes Valve lose money.

Valve earn money when people buying key. If key became craftable, people tend to not spending their real life money buying keys, they will choose to save until thy can craft key. This will reduce Valve's income.

What if Valve decided to add key recipe? Hm... let's discuss

*If we speak from microeconomics aspect, the craftable key will cause the Supply for key became increased tremendously. In a short term, this may help control the key price from rising. However, people will start crafting lots of key and try to sell it for profit. This caused the key supply increased. Eventually, the increase in Supply caused the price of key go down. Also, it is possible that excess supply problem will occur, excess supply will cause the key price drop a lot. Making user's backpack value went down.

Or simply said, in a long terms, TF2 economy will became deflated. Uncontrolled deflation can be very serious problem especially for key holders. Also, if the price of key were dflated, other item's value might became deflated too.

Here is graph that might help explain what happened if key became craftable.
E0 is the original equilibrium of prices. P0 and Q0 is the original price and the quantity for the key respectively.

If the key became craftable. We can expect that the Supply will increase from S0 to S1. The new equilibrium of balance will move from E0 to E1. The price will became lower(P1) but the quantity demand for key will became higher(Q1) as community can buy keys at cheaper price.

However in a long term, excess supply can happening
Yellow line indicate excess supply. Let's say the Quantity demand(Qd) is 500 keys but the supply(Qs) for key is 1000. This caused 500 excess supply in the market.

As a result, trader had to lower the price(P0 to P1) to the point of equilibrium(E0) in order to maximize the profit. Selling key at any price higher than that will not able to attract buyers.

*If key became craftable, we can assume that it limit key's price. Let's say the crafting recipe is 10 ref = 1 key?
Current key price is 24 ref = 1 key, if such crafting recipe were introduced, the key price will became unstable.
It is possible that the price of key will became 10 ref in a blink of eye. Player's backpack value will instantly devalued.

This graph will explain what will happen if key price became limited.

Let's say E0 is the current equilibrium of balance. Original price(P0) is 24 ref with quantity demand of Qd.

If key became craftable at 10 ref = 1 key. Basically, the price will dropped to new P1 and the quantity demand for key increased to Q1 because key becomes cheaper and more people can buy it. Consumer(or buyer) surplus increased(indicated by purple ugly paint) but the seller surplus decreased(indicated by brown stupid paint).

4) Selling key at very low price
Attempt to do this can lead to loss.

If you tend to selling things lower than market price, you will gain infinite amount of demand(or simply said, people want to buy stuff from you). However, in a long term, you will face loss.

Loss = bad

However, your buyers, they got beneficial from it and later they might selling the key back at market price.

Basically, nothing changes when people do this. The seller themselves will facing loss for selling things much lower than market price.

5) Valve should add new types of currency to replace key
I guess it was partially added? You can buy & sell stuffs using Steam Community Market.

I don't think Valve will add in-game item that act as currency. They didn't even interfere the economy at all, why would they add something that can change the economy?

6) Tax & Subsidize system
This is actually my own idea but I do not like my idea at all as it it is also not able to help the community. But I'll still going to explain it and list the problems it got.

Basically, someone create a website and allow player to buy & sell item there. However, user had to pay some metal as tax, the richer the player is, the more tax they going to pay to use the service. All the metal collected will became subsidy for the other users.

Let's say 24 ref = 1 key, the subsidize system provide 2 ref subsidy for the users. The key price will go down to 22 ref = 1 key.

Effect of subsidy to the key price
At first the original point of equilibrium will be located at E0 with the price P0 and quantity demand Q0.

When subsidy are given, it reduce the price of key from P0 to P1. Quantity demand for the key will increase of Q0 to Q1. Point of equilibrium will change from E0 to E1.

At first, I saw this as the perfect way to greatly increase some player's trading power until I realized the following problems.
-Abuse?
Even though subsidy helps increase the user's buying power but I realized that some people will buy the key then sell it back at original price.
-Source of income?
Even though tax is the main source of income if we want to offer subsidy, but I think most of the people don't like to pay taxes to use something.

Also, the income might became higher than expenses.

7) Ignore the market price, my price is the best.

I've saw a lot of people that disagree with the key price done this. Basically, you don't follow the backpack.tf's prices.

Those are going to do this are most likely suffering loss. Most of the traders nowadays refer to backpack.tf price when they going to buy/sell items. Setting your own price without refer to market price might not attract traders especially those follow the backpack.tf prices.

Also if selling price lower than backpack.tf prices, you can attract the buyers but you will most likely going to suffer loss in a long term.

8) Shutdown backpack.tf
I've saw this a very long time ago and this is kinda like the ridiculously funny idea.

Yes, let's shutdown backpack.tf and let the trader using barter system like in stone age!

1 key for 1 golden pan? Sound worth to me!
Tour of Duty ticket only got 1 use, so it only worth 1 scrap!
*sarcastic*

Barter trade system is the best stuff in the history of the world.

9) Pray for deflation occur
Maybe this is the best way? Hope for the demand for key slowly decreasing so that the price of key will slowly go down.

Deflation might be helpful for those wanted to buy/earn a key. However, uncontrolled deflation can ultimately lead to massive economy crash where everything became too darn cheap and things became worthless.

Oh by the way, by judging looking at current situation, don't expect key price deflation to occur.

I've read a lot about people saying that TF2 economy is dying.

In my humble opinion, I don't think it's dying, it just rate of key price inflation higher than the income of the traders.

Also, blaming Valve for surging the key price was not correct anyway. It's their own game, they owned it, thy can do anything they want. Also, economy is not introduced by Valve anyway, TF2 economy was started by community themselves.

If I want to predict TF2's future economy, I would say the price of key will increase and reach at least 25 ref before January 2017

Thank you for spending time reading my guide.

If there's any mistakes in my guide, please report it in comment section below!

Also, I would like to see everyone's feedback about this guide, your feedback means a lot to me.

Fun fact: I wrote this guide to help me remember micro-economy concept better so that I can do better in my semester exam.

If you like this guide, help me by liking this guide and share it to your friends!