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What are the functions of price mechanism in a free market economy?

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Answer of Price mechanism

Price Mechanism

Price mechanism is the point which equilibriates supply and demand within a market. It is a mechanism of pricing.The price mechanism is one which allows the prices of good and services to be decided by the interplay between supply and demand. There is no centralised price fixing.

The price mechanism is the concept that the free market, when left to its own devices, will formulate fair prices of the goods or services on its own by the natural laws of supply and demand.

First answer by ID0977559902. Last edit by ID0977559902. Question popularity: 33 [recommend question].

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