price mechanism

Definition

The theory that the determinations about what prices and quantities to purchase are essentially set by both sellers and buyers in the market.

Use price mechanism in a sentence

We studied the price mechanism long and hard in order to fully understand the underlying principles of the market we had recently entered.

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When he was considering how many shares of Apple stock to purchase, he realized that the price mechanism machinery had basically already dictated how many shares he could purchase ad when he could purchase them.

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When a new item or product is introduced to the market it is difficult to determine a fair price. Many companies utilize the Price Mechanism and allow buyers and sellers to collaborate and determine what ideal price is for them.

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