What Is a Free Price System?

The price system is also called the price structure. In the eyes of some economists, the market is the most effective way to regulate the economy, and the price is the signal light. The price system refers to the organic whole of the prices of various goods, services, and factors of production in a country or region, and reflects the internal relationship of the various prices and the mutual constraints. The broad price system refers to a price system that includes the prices of goods, services, and factors of production. Reforming the price system must not only rationalize the prices of goods and services, but also rationalize the prices of factors of production. The reforms of the two are mutually restricted and affected.

price system

The price system is also called the price structure. In the eyes of some economists, the market is the most effective way to regulate the economy, and the price is the signal light. The price system refers to the organic whole of the prices of various goods, services, and factors of production in a country or region, and reflects the internal relationship of the various prices and the mutual constraints. The broad price system refers to

The substance of the price system

The analysis of the price system according to its internal connections and the different levels of status of various prices is made up of various prices connected through vertical connections and horizontal connections. The vertical connection between the prices of the same commodity at various links in circulation is called the commodity spread; the horizontal connection between the prices of various commodities (labor services) provided by various sectors of the national economy.

In China, due to the state's direct administrative control or indirect macro-control on the prices of some commodities (labor services), there is an additional level of management difference between the prices of commodities (labour services) and the resulting correlation.

The price system includes three aspects: the price relationship between similar products is the commodity price difference system, the price relationship between different products is the commodity price comparison system, and the price form system formed according to economic management principles.

Price system commodity spread system

During the process from the time when production enters the circulation to the time when it enters the consumption field, time and space movements occur, resulting in changes in value and utility, thus forming a price difference and a price difference system for various commodities.

Reasonable purchase and sale spreads and batch-zero spreads are to coordinate the interests of industrial and commercial agriculture and commerce, wholesale and retail enterprises, and the state and consumers, ensuring that goods reach the consumer link safely, quickly, and efficiently from the production link, so that their utility and value are sufficient The important conditions for realization are also important tools for controlling the sales price level in the current price system.

Causes of seasonal spreads

Seasonal price difference is the price difference of the same product in the same market due to different seasons. Its significance lies in alleviating seasonal fluctuations in production and consumption and the relative balance of the market.

Causes of regional spreads

When the same kind of goods are transported from the place of origin to the place of sale, the operating unit needs to pay a certain amount of transportation costs and interest and losses during the transportation, thus forming a regional difference. Reasonable regional spreads are conducive to promoting the normal circulation of commodities and expanding inter-regional commodity exchanges, and are conducive to a rational distribution of productivity.

The price difference caused by the quality difference of goods (labor services). On the one hand, it has nothing to do with the time and space movement of the commodity, so it is different from the above-mentioned spread; on the other hand, it is formed by the difference in value and utility, so it has the same connotation as the above-mentioned spread. The quality difference is of great significance to promote enterprises to improve product quality, use value engineering principles to improve business management, and thereby promote the overall improvement of resource use efficiency.

Price system

In the exchange, different commodities (labor services) are linked in accordance with the requirements of the law of value, forming a parity system for various commodities, such as industrial and agricultural product parity, internal agricultural parity, internal industrial parity, and industrial and agricultural products. Parity, etc.

In the commodity parity system, the parity of industrial and agricultural products reflects the interests of national industrial enterprises and farmers. The price of agricultural products not only directly determines the income of farmers, but also determines the wages of employees to a large extent. The wages affect the cost of industrial products, transportation costs, construction costs and service industry expenditures, and thus affect the prices of industrial products and transportation. Transport prices, construction product prices, and service charge levels.

The price level of cash crops in agricultural products is directly used as the raw material of industrial products, which determines the cost level of industrial products, and thus determines its price level. The internal price ratio of agricultural products reflects the relationship between the production income of various agricultural products. The balance and coordination have a decisive influence. The internal price comparison of industrial products reflects the interest relationship between industrial enterprises and between industrial enterprises and the state. The prices of industrial raw materials and energy have an impact on the cost and prices of products in all sectors of the national economy, and have a decisive role in the formation and evolution of industrial production structures.

Price system

Divided by the strictness of state management, China has three forms of price management: government-guided prices, government pricing, and market-regulated prices. These three price forms are quantitatively combined in terms of numbers. For example, in 1990, the national pricing component accounted for 31% of the total agricultural product purchases, the national guidance price component accounted for 27%, and the market-adjusted price accounted for 42%; the total social commodity retail price accounted for 30%, the national guide price part accounts for 25%, and the market adjusted price accounts for 45%. In terms of function, it is organically combined, that is, the three price forms have certain influence on each other in different regions, different ownerships, different products, and different periods.

In the national economic system, various types of producers produce and manage millions of commodities. There are as many prices as there are commodities. Each product has different specifications, models, grades, colors, styles, and different prices. They also differ due to different stages, regions and seasons in the production process and distribution process. Each commodity is an integral part of the price system, so different commodities do not exist in isolation from each other. They form an organic whole that is interrelated, affects, and restricts each other.

This organic connection between various commodity prices is prominently manifested in changes in the price of one commodity, which tends to retract changes in the prices of other commodities; changes in the price of commodities in one region often cause changes in the prices of commodities in other regions. .