-Price represents the value placed upon scarce items or resources, usually identified by some common denominator used as a medium of exchange, that is, money.
-Prices are:
– Goods – prices (market prices for items)
– Labour – wages
– Capital – Interest
– Loans – interest
– Foreign currency – exchange rate.
– Entrepreneurship- profits
-In the liberalised economies, the prices of either goods or resources are determined by the forces of demand and supply in the market.
-In the fully centralized economies, prices are regulated by the central authority.
-In mixed economies, it is a compromise of the two (market forces and central regulation).
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