Question

The Price mechanism is a feature of–

Answer 1

Price mechanism is an economic term that refers to the manner in which the prices of commodities affect the demand and supply of goods and services. It is essentially a feature of market-driven or capitalist economic systems. 

It is based on the principle that only by allowing prices to move freely will the supply of any good commodity match demand. It affects prices of goods or services. It is also known as market based mechanism which is found in capitalist economy that refers to a wide variety of ways to match up buyers and sellers through price rationing.