The virtue of the price system is that only transactions with more benefits than costs take place. Read more.
Consumers confronted with the price compare it to the benefit they figure the product or service will give them. If the anticipated benefit is greater than the price , they go ahead and buy, which is what you want. If benefit is less than price/cost, they pass — which is also what you want.
The end result of buyers’ and sellers’ interaction is that all transactions where benefits exceed costs take place, while all transactions where benefits are less than costs don’t. Which means overall benefits exceed costs by as much as possible, which presumably is what you want when you set about allocating resources. And it all happens automatically, as consumers and producers pursue benefit and profit, respectively. Thus the great beauty of the price system.
Yes, lots can go wrong. Producers may collude or compete unfairly . Consumers may not understand what’s good for them or may try to free-ride on goods they hope others will buy for them .Article content Or there may be costs that fall on third parties, consequences of A and B’s transactions that fall on C. So run a legal system that allows C to sue. Or, if third-party costs are widespread but it’s hard for all the C’s to get together and sue, try a patch-up on the price system. Tax whatever the activity is, imposing a levy that — according to your best guesstimate — approximates the damage done to the C’s.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
William Watson: Bob Barker's truth: The price is (almost always) rightThe virtue of the price system is that only transactions with more benefits than costs take place. Read more.
Read more »
Bob Barker 'couldn't have been nicer,' says former Price Is Right contestant from the SaultChristopher Somme describes his brush with the longtime host of the popular game show during a 2005 television taping as a 'surreal experience' following Barker's death
Read more »
William Watson: Of course we have a rental crisis. Who would want to be a landlord?Rental housing is a lousy investment and has been since provinces started imposing rent controls in the 1970s. Read rmore.
Read more »
Vanna White Thanks Bob Barker For Introducing Her To The ‘Game Show World’ After His DeathVanna White credits the late Bob Barker with her introduction into the world of game shows. The legendary 'Wheel of Fortune' presenter took to Instagram over the weekend to honour Barker in the wake of his death at the age of 99. Sharing an epic throwback photo of herself appearing on Barker's show, 'The Price Is Right', White,…
Read more »
Bob Barker's legendary career as a television host and animal activistA look back at Bob Barker's iconic television career and his work as an animal activist after dying at the age of 99.
Read more »
Bob Barker remembered as ‘strong voice for animals’ in Canada, says wildlife advocateCampaigns director at Zoocheck knew Barker for years as they collaborated on both successful and failed efforts to free animals from captivity at Canada’s zoos
Read more »