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Price
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==Functions of prices== According to [[Milton Friedman]], price has '''five functions''' in a '''free-enterprise exchange economy''' which is characterized by private ownership of the means of production:<ref>Milton Friedman, “Lerner on the Economics of Control”, in Milton Friedman (Ed.), ''Essays in Positive Economics''. Chicago: University of Chicago Press, 1953, pp. 304.</ref> * '''Transmitting''' information about changes in the relative importance of different end-products and factors of production. * '''Providing''' an incentive for enterprise (a) to produce those products valued most highly by the market, and (b) to use methods of production that economize relatively scarce factors of production. * '''Providing''' an incentive to owners of resources to direct them into the most highly remunerated uses * '''Distributing''' output among the owners of resources * '''Rationing''' fixed supplies of goods among consumers.
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