This article focuses on the apparent mystery of how people in a market economy behave cooperatively while pursuing their own self-interest. At first glance, such cooperation may seem impossible. Producers compete with other producers for customers, but producers also cooperate with suppliers, with employees, with advertisers, with customers, with literally millions of unknown people to provide what customers want. Prices are vital sources of information. Prices tell consumers how much other consumers value products.
Prices tell producers how much consumers value goods and how much other producers value inputs.
Based on the information prices convey, people make decisions about how to spend their money, and this in turn, sends signals to millions of other people about what to produce, how much, and when. Without a free market and freely set prices, resources are wasted through misallocation. Understand how a free market actively promotes social cooperation. See the essential role that prices play in promoting social cooperation. If the student has a part-time job ask him or her to explain the different ways in which he or she is a part of the huge web of social cooperation that makes up the world economy.