In this article we will discuss about the mechanism of price system. Also learn about its functions and purposes. All economies face the same problems although their approach to solving them may differ. In a capitalist country, or even in a mixed economy like our own, prices perform, or can be used to perform, three basic functions: 1. The allocation [...]
The following points highlight the top six strengths of market mechanism. The strengths are: 1. Coordination of Decentralized Decision 2. Rations Goods and Resources 3. Gives Signals to Product Goods 4. Gives Signal to Investment 5. Determines Income Distribution 6. Freedom of Enterprise. Market Mechanism: Strength # 1. Coordination of Decentralized Decision: In a market economy, one encounters thousands of [...]
Let us make an in-depth study of Price System of an Economy. After reading this article you will learn about: 1. Meaning of Price System 2. Working of the Price Mechanism 3. Conditions Required 4. Price Mechanism and What, How, and For Whom. Meaning of Price System: Market is the essential ingredient of a capitalist economy required for its efficient [...]