Price system
From Wikipedia, the free encyclopedia
The term price system is used to describe any economic system whatsoever that effects its distribution of goods and services by means of goods and services having prices and employing any form of debt tokens, or money. Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used for all resource allocation decisions today. Allocation of resources within governments, or corporations and households is sometimes commonly undertaken without reliance on a price system.[citation needed]
[edit] Fixed price versus free price systems
A price system may be either a fixed price system where prices are set by a government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system.
[edit] History
Fundamentally, price systems have been around as long there has been trade or money. From its beginnings, the price system has evolved into the system of global capitalism that is present in the early 21st century. The Soviet Union and other communist nations were controlled price systems.[citation needed]
