Price is negotiation between the buyers and the sellers. To figure out price one has to law the supply and demand next top each other. When we then plot and draw both curves together we are able to see the market price of the product. The market price for cookies in this graph is 30 cents. The quantity sold and bought is 1100 cookies.
Prices are key ingredients in our economy because they make things happen.
If buyers want to own some items badly enough, they will pay more for them. When sellers want to sell some items badly enough, they will lower their prices. Prices play such an important role in economic life that the United States is often described as a price-directed market economy. Let us see why. 1. Act as Signals to Buyers and Sellers .