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EoE: 5.1.A - What do Prices "Know" That You Don't?
From What do Prices "Know" That You Don't? (2016).
According to Professor Michael Munger, prices (as in, the price of a carton of milk or a new car) are akin to magic. Prices “magically” convert countless pieces of dispersed, complex information into a single signal that conveys to sellers what they should do to best benefit society. By ignoring the price system, you’re really ignoring the needs of those whom you want to serve. This is the “magic” of the price system – it merges the needs of society with each seller’s desire for profit. This video is included as part of a 40-lesson course on the Economics of Entrepreneurship available now for teachers and students at no charge at FEE.org/Courses.
Contributed by
Foundation for Economic Education