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EoE: 5.1.B - The Price System

Why are prices important? Prof. Daniel J. Smith of Troy University describes the role that prices play in generating, gathering, and transmitting information throughout the economy. Information about the supply and demand of different goods are dispersed among different buyers and sellers in an economy. Nobody has to know all this dispersed information; individuals only need to know the relative prices. Based on the simple information contained in a price, people adjust their behavior to account for conditions in supply and demand, even if they are unaware of that information. 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.

from The Price System, Part 1 (2016)
Creator: Learn Liberty
Posted by Foundation for Economic Education
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