What Is a Price Mechanism?
The price mechanism is the basic mechanism in the market mechanism. The so-called price mechanism refers to the formation and operation mechanism of market prices that are interconnected with supply and demand during the competition process. The price mechanism includes a price formation mechanism and a price adjustment mechanism. The price mechanism is in the process of market competition, the mutually restricting relationship and effect between price changes and changes in supply and demand. The price mechanism is the most sensitive and effective regulation mechanism in the market mechanism, and price changes have a very important impact on the entire social and economic activities. Changes in commodity prices will cause changes in the supply and demand of commodities; changes in supply and demand will, in turn, cause changes in prices.
Price mechanism
- Under socialist conditions, the price mechanism
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- The price conveys economic information such as the supply and marketing of commodities in the market with its own direction and amplitude.
- The price mechanism is the
- China has long neglected
- Market price formation mechanism
- The gradual realization of the mechanism of forming commodity prices mainly based on market supply and demand is the key to giving play to the fundamental role of the market in resource allocation and the goal of price reform in China. At present, the prices of most commodities in China, including the means of production, have been changed by
- Price mechanism
- Price management system
- The price management system is a general term for various specific management systems and management forms in which socialist countries manage and regulate commodity prices. Under China's original traditional planned economic model, an excessively centralized price management system was formed. Almost all goods are priced by the government, which excludes the role of the market mechanism in price management, hinders the formation of prices mainly by the market mechanism, and does not allow prices to change in time with changes in the value of goods and the relationship between supply and demand. The irrationality of China's price system is closely related to the irrationality of the price management system. Reforming the price management system is to change the single government pricing method and implement a price management system that focuses on market formation prices. That is to say, except for a small number of commodities and some public welfare undertakings and labor services, which are uniformly priced by the government, other commodities and labor services must gradually release their prices and be priced by the enterprises that are the main players in the market. Unified government pricing refers to the pricing or guidance prices set by the price department and the competent business department of the government at or above the county level in accordance with the authority prescribed by the state.
- Improve market management regulations
- Establishing and improving market management regulations, strengthening market management, and promoting the standardization and legalization of market operations are important components of cultivating and developing the market system. The content of market management regulations is very extensive and can be divided into the following three categories:
- (1) Regulations for market operations. This is a regulation that acts directly on the market and is necessary to ensure the normal operation of the market. It includes common regulations for the operation of various types of markets, as well as special regulations for the operation of different types of markets; the former, such as regulations for entering and exiting markets, regulations for equivalent exchanges, regulations for voluntary transfer of goods, regulations for fair competition, etc. The latter is based on the characteristics of the consumer goods market, the means of production market, the financial market, and the labor market.
- (2) Regulations on internal management and economic behavior of enterprises. Including laws and regulations on the definition and transfer of property rights of enterprises, especially state-owned enterprises. Laws and regulations establishing the status of an enterprise as a legal person, laws and regulations governing the exercise of autonomy in production and operation, state-owned enterprises implementing regulations such as the contract system, leasing system, and shareholding system, and various internal management and reward regulations. They are the micro foundation for determining the order of the market economy.
- (3) National economic behavior regulations. Includes laws and regulations on government-enterprise relations, central and local relations, and relations between government economic management departments; national industrial and commercial administration, taxation, price, statistics, auditing, and fiscal departments' work systems and behavioral regulations; Regulation and management regulations. They are an important guarantee for maintaining the order of the market economy. Among them, the establishment of regulations to eliminate unequal competition and achieve fair competition is the core of market regulations.