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Just started out on a new game and as usual i killed R'avirr the trader to steal his weapons. He has about 14,000 worth of weapons and the Bounty for killing him is just 40 coins for some reason.

Why is the bounty so low? I mean you can pnch some charecters and end up getting chased all around town by a small army of charecters but murdering R'avirr is not just allowed its practically encouraged.

And are there any other minor charecters who can be killed for massive profit?

for the first part, the bounty is for the assault, but I think since no one witnesses the murder, it's not added. Maybe someone can clarify this, because the uesp wiki article regarding crime doesn’t specify this particularity. Unless this is the reason: ‘’ Sneak criticals will usually not net you a murder bounty if you killed the NPC in the first hit, even if they were in plain sight’’.
what I do know otherwise : upon death, NPC’s lose ownership over their items, and thus you can loot their corpses and stores without incurring additional bounty.
As you play, you'll see that his 14,000 worth are nothing compared to the money you can make from weapons, armor, and many other items which you can sell and become a millionaire… unless you use a mod limiting these possibilities in any way (such as lowering item’s values and/or making economy harder). In vanilla game, however, you can quickly earn so much cash you won’t know what to do with it and maybe regret having killed poor ol’ Ra’virr, especially since some mods add items to him either directly or indirectly… and that he can be used for 1 quest (but he’s not needed for it, luckily).

Like violetz said, I'd say the 40 gold bounty is for the assault only and not the murder due to lack of witnesses, and you only really got that bounty because of his class (a trader). If you had killed a commoner with no witnesses around, you wouldn't have gotten a bounty at all (at least from what I remember). It should be pointed out that you can kill just about anyone in the game without getting a bounty if you taunt them into a fight and get them to attack you first, which can lead to some really profitable murders.

Personally, I usually kill the guy in Nerano manor. He's used for a Thieve's Guild quest, but he's not required, and he has a ton of good stuff to steal. Not as much as Ra'virr though.

Per bounties, assault is and always has been 40 gold no matter the citizen. It just depends how close any guards are or if you're in an actual city. I've punched many a commoner that did not address properly and faced many bounties this way.

As for murdering, murder Fargoth. Always murder Fargoth. He is the most valuable kill. He pays... In happiness.

Otherwise, I don't know many NPCs that are easy to kill with bounds of money or valuables that won't be used to kill you easily. If I have a low level character that's really strapped for cash, I'd just make a trip to the ebony mines of Caldera. Granted it helps being sneaky, but there are a few isolated veins you can use for a quick pick me up for your bank account. Otherwise you might as well go out and find a cave of bandits and take all the goodies in the boxes. Piling all of the loot onto one body will help you around encumbrance. Just bring an Intervention scroll and make sure you have a few jugs of sujamma to run around between the merchants in whatever town you end up in (most crates will have some booze in there for you anyway, and what better way to celebrate?).

Honestly, I don't see murder in Morrowind being that profitable. With a good chameleon (amulet of shadows is where its at) you can get away with stealing a ridiculous amount of loot. Once you can easily kill Dremora Lords, you get a supply of daedric weapons most of which you probably can't use anyway. Creeper and the Mudcrab Merchant are your best friends in Morrowind, on my older character Nerosa I had tons of money just from selling Daedric and Ebony stuff to the Mudcrab Merchant.

You have the bonus in this game of not needing a fence to sell stolen stuff. Stealing pays much better than murder, and can be done with incurring no bounty at all if you do it right.