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pricesdeterminehowresourcesaretobeused.theyarealsothemeansbywhichproductsandservicesthatareinlimitedsupplyarerationedamongbuyers.thepricesystemoftheunitedstatesisacomplexnetworkcomposedofthepricesofalltheproductsboughtandsoldintheeconomyaswellasthoseofamyriadofservices,includinglabor,professional,transportation,andpublic-utilityservices.
theinterrelationshipsofallthesepricesmakeupthe"system"ofprices.thepriceofanyparticularproductorserviceislinkedtoabroad,complicatedsystemofpricesinwhicheverythingseemstodependmoreorlessuponeverythingelse.
ifoneweretoaskagroupofrandomlyselectedindividualstodefine"price",manywouldreplythatpriceisanamountofmoneypaidbythebuyertothesellerofaproductorserviceor,inotherwordsthatpriceisthemoneyvaluesofaproductorserviceasagreeduponinamarkettransaction.
thisdefinitionis,ofcourse,validasfarasitgoes.foracompleteunderstandingofapriceinanyparticulartransaction,muchmorethantheamountofmoneyinvolvedmustbeknown.
boththebuyerandthesellershouldbefamiliarwithnotonlythemoneyamount,butwiththeamountandqualityoftheproductorservicetobeexchanged,thetimeandplaceatwhichtheexchangewilltakeplaceandpaymentwillbemade,theformofmoneytobeused,thecredittermsanddiscountsthatapplytothetransaction,guaranteesontheproductorservice,deliveryterms,returnprivileges,andotherfactors.
inotherwords,bothbuyerandsellershouldbefullyawareofallthefactorsthatcomprisethetotal"package"beingexchangedfortheasked-foramountofmoneyinorderthattheymayevaluateagivenprice.