I’m no Communist, I’ll tell you that right now, I believe a man should own his own house and car and cow I like this private ownership, I want to be left alone, let the government run its business and let me run my own So prices give us incentives and they give other people incentives basically to get things done, because we can’t do everything for ourselves, we get other people to do things for us and prices are an important part of that. So prices will also determine how much each resource gets used, it does this through consumers demand, consumers will dictate what they want, and specifically to what consumers demand, it relates to what will get produced more of and that will determine how much each resource will get used. People often confuse prices as a barrier to what people want, rather what prices are is an indicator to what people want through the means of supply and demand. Supply and demand is important to understand; if you have a high supply of something, there’s more of it to go around, therefore there’s going to be a lower demand, meaning a lower cost; whereas if you have a lower supply of something, there is a scarcity, meaning there’s going to be a higher demand and of course a higher cost. Prices is not what causes scarcity, scarcity is determined by how much of those resources are available to us and how high a demand there is for those resources. So as we pointed out, high prices in the market signifies scarcity and prices can be a good incentive to change the behaviour of customers, customers may spend less on the higher costs and it’s a very good thing because of the scarcity where they may spend more on the lower costs where there is an abundance of resources. Prices can be a good incentive to producers to lower their costs; perhaps they have a certain product that isn’t selling as well, so they may reduce the costs of the product to increase consumers demand to try and sell off; they will make losses, but not as heavy losses as they would if they kept the price high. So people confuse Capitalism as just a system of profits, Whereas Capitalism is all about profits and losses. It’s important to understand losses because what losses tell the market, is what to stop producing more of, where to stop putting resources and what to stop investing in. In other words, it tells businesses that if they produce certain products and the product isn’t selling, they’re not going to produce more of that, not only because the fact that they would be making losses in doing so as a business, as a businesses goal is to make profits but also because, it’s wasting valuable resources and resources are scarce. So, it’s important to understand, that Capitalism isn’t just about, you know profits, but of course, also losses; whereas the profits tell the businesses what they must produce more of and what to invest in and where to put resources. So it’s very important that people understand, Capitalism is more than just profits, it’s profits and losses. So another thing that is important to understand about prices, prices aren’t just a random number that is thrown out there, it’s determined by consumers demand, what consumers are willing to pay for it. So in other words, you could produce certain products, you could throw the product out there and to set what you value the product at, but that’s all well said and done it’s what your consumers are willing to pay for that product that will determine its price. and it’s also important to understand that competition, through what your competition is going to charge, if your competition charges less, that will determine where your consumers are going to go. So competition and of course consumers demand is what determines prices. So if you have any questions at all, feel free to ask me in the comments section below and I’ll be sure to get back to you. Thank you for watching my video and I shall talk to you’s later, cheers! Hi people, how’s it going? Just wanted to let you know that I’m working hard to get all my new videos up and running. If you like my channel, feel free to subscribe and of course I value all my viewers and subscribers and working hard to get obviously my channel up and running again. So, thank you for watching and I shall talk to you’s later!