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Basically the price mechanism acts as "an invisible hand" or signaling mechanism. They play a key role in allocating resources and the distribution of the national product. Consumers react to prices...
This is when consumers and producers respond to information( signalling) and incentive provided by the prices then scarce resources will be rationed between competing uses
The price mechanism as you put it, is actually the way that goods are exchanged for money. If the price is too high not many goods are sold, if it is too low, stocks quickly depleate. So this...
as per the name APM means administering the price of petroleum oil to control the demand & price from the oil marketing companies by the intevention of govt. recently petrol price is deregulated...