Abstract: Price mechanism allows the determination of ways to allocate resources among different goods and services as a result of the interaction of consumers and business outfits. It is the process by which changes in prices guide and shape changes in the value and types of the goods and services that are produced. This however may be a complex situation since pricing is dynamic. Also, since consumers and business outfits strife to maximize their benefits, it is important to establish price mechanism in a socialist economy. This study, hereby presents how price mechanism works in a socialist economy, the merits and limitations comparatively with other market economies. The paper concluded that the existence of price mechanism has little or no relevance in a socialist economy. This implies that the situation may not be operative in a socialist economy where all decision making lies within the government forces. Price mechanism is a distinguishing feature of a free market economy which does not pertain to a socialist economy.
Keywords: Price mechanism, consumers, businesses, producers, socialism, socialist economy.
Title: UNDERSTANDING PRICE MECHANISM IN A SOCIALIST ECONOMY
Author: Park O. Idisi, Ibukun Joyce Ogwu, Wofai Onen Obeten
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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