Who (to tell) workers where (to work) or what occupation to choose ? Who (to declare) how many cars should (to produce) and how many homes should (to build) ? Who (to specify) the predominant style of women’s dresses or men’s suits? The greater the degree of competition the more these matters (to decide) impersonally and automatically by the price system or the market system. This may (to view) as a system of rewards and penalties. Rewards (to include) profits for firms and people who (to succeed) . Penalties (to include) losses, or probably bankruptcy, for those who (to fail) . The price system (to be) fundamental to the traditional concept of market economy.
The price system basically (to operate) on the principle that everything that (to exchange) — every good, every service, and every resource — (to have) its price. In a free market with many buyers and sellers, the prices of these things (to reflect) the quantities that sellers (to make) available and the quantities that buyers (to wish) (to purchase) .
Thus, if buyers (to want) (to purchase) more of a certain good than suppliers (to have) available, its price (to rise) . This (to encourage) suppliers (to produce) and (to sell) more of it. On the other hand, if buyers (to want) (to purchase) less of a certain good than suppliers (to prepare) (to sell) , its price (to fall) . It (to encourage) buyers (to purchase) more of it.
This interaction between sellers and buyers in a competitive market, and the resulting changes in prices, (to be) what most people (to refer) to by the familiar phrase “supply and demand”.