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The price mechanism is a way for buyers and sellers to determine the price of a product or service in a market. It works by using supply and demand to set the price, which can change based on the amount of goods or services available and the number of people who want them.
A working example of the price mechanism in action is the housing market. If there are a lot of people who want to buy homes and not many homes available, the demand is high and the price goes up. If there are more homes available than buyers, the demand is low and the price goes down.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
The price mechanism is a market tool,
That helps us find a fair price rule,
It uses supply and demand as its fuel,
To determine the cost that's cool.
When there's more buyers than homes to buy,
Prices go up and up to the sky,
But when homes abound and buyers shy,
Prices come down, oh my oh my.
The price mechanism works in many ways,
From goods and services to holidays,
It's a fair way to set the price phase,
And keep things fair in many ways.