Abstract
The value of a good is the rate at which it exchanges for other goods. This rate is usually expressed in money terms as a price. Thus, by comparing prices, we can compare the rates at which different goods can be exchanged. Changes in relative prices are the signals which indicate changes in demand or changes in the conditions upon which goods can be produced. These signals are flashed up in the market.
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© 1994 Jack Harvey
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Harvey, J. (1994). How Price is Formed in the Free Market. In: Economics Revision Guide. Palgrave, London. https://doi.org/10.1007/978-1-349-13313-0_3
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DOI: https://doi.org/10.1007/978-1-349-13313-0_3
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-60195-2
Online ISBN: 978-1-349-13313-0
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