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Definition
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Price t|cTl/i
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Prices determine how resources are to be used. They are also the means by which products and Aw7_ diK^
services that are in limited supply are rationed among buyers. The price system of the United States is YjwC8#$
a complex network composed of the prices of all the products bought and sold in the economy as well 5c6?$v /
as those of a myriad of services, including labor, professional, transportation, and public-utility services. 3W"l}.&ZJ"
The interrelationships of all these prices make up the “system” of prices. The price of any particular 6 e :#x:O
product or service is linked to a broad, complicated system of prices in which everything seems to 7G
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depend more or less upon everything else. vC%8-;8{H
If one were to ask a group of randomly selected individuals to define “price”, many would reply that 'mE!,KeS;
price is an amount of money paid by the buyer to the seller of a product or service or, in other words T8-,t];i
that price is the money values of a product or service as agreed upon in a market transaction. This x10u?@
definition is, of course, valid as far as it goes. For a complete understanding of a price in any rCgoU
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particular transaction, much more than the amount of money involved must be known. Both the buyer cP`[/5R
and the seller should be familiar with not only the money amount, but with the amount and quality of geSH3I
the product or service to be exchanged, the time and place at which the exchange will take place and
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payment will be made, the form of money to be used, the credit terms and discounts that apply to thetransaction, guarantees on the product or service, delivery terms, return privileges, and other factors. s|o+
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In other words, both buyer and seller should be fully aware of all the factors that comprise the total nx'Yevi0$
“package” being exchanged for the asked-for amount of money in order that they may evaluate a >}6V=r3[+
given price. SH/^qDT'
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Electricity pF}W Mt
The modern age is an age of electricity. People are so used to electric lights, radio, televisions, and @;ob 4s U
telephones that it is hard to imagine what life would be like without them. When there is a power a ?ux
failure, people grope about in flickering candlelight, cars hesitate in the streets because there are no oeIza<:=R
traffic lights to guide them, and food spoils in silent refrigerators. s>1Wjz2M
Yet, people began to understand how electricity works only a little more than two centuries ago. qB8R4wCf
Nature has apparently been experimenting in this field for million of years. Scientists are discovering
