Price is what a buyer pays and a seller receives for a good or service. It is the meeting point of supply and demand. Prices carry information. They tell producers what to make and consumers what to conserve. They coordinate activity across millions of people who never meet.

Prices are not just numbers. They reflect costs, scarcity, competition, and perceived value. A bottle of water costs more at a stadium than at a supermarket. The water is the same. The context is different. Location, convenience, and willingness to pay all shape the final number.

Governments sometimes set prices. Rent control, minimum wages, and price ceilings on essentials are common. These policies aim to protect consumers or workers. They also create side effects: shortages, surpluses, or black markets. The debate over when to intervene is one of the oldest in economics.

Functions of price

• Signals scarcity
• Rations goods
• Incentivizes production
• Coordinates markets
• Reflects value