You indicate your unhappiness with your local government officials by moving to a nearby city. All of the above are examples of the exit method of communicating messages. If both the supply and demand for computer games decrease, the equilibrium price of the games is indeterminate, and the equilibrium quantity will increase. The price of steel decreases. Buyers of steel will probably discontinue purchasing steel. increase their purchases more in the short run than in the long run.
Market prices communicate information to buyers and sellers.
Market prices coordinate the decisions of buyers and sellers. Market prices indicate to policy makers those goods on which price controls should be imposed. Market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. Central planning by government will result in the efficient use of resources. In a democratic setting, majority rule will result in the efficient use of resources.