| The first lesson about economics is that everything is only worth what someone is willing to pay for it. Prices fluctuate regularly because people constantly change what they are willing to pay for one item compared to other items. Supply and demand are major causes of price and price is a major factor on supply. The role of prices are vitally important factors in ensuring the best efficiency and advances, government unduly influencing price does great harm. |  |
 | When this economic law is violated by the government, less economic activity occurs. By government violating this law, we have wreaked havoc and reduce efficiency. This occurs by many variations of price controls such as explicit price controls, subsidies, tariffs, barrier to entrance, corruption, among others. When the government is a significant buyer of a specific sector of the economy, it ultimately becomes price control. |
| With over 318 million people in America and 20 times that around the world, we realize that everyone has different mindsets and therefore a different willingness to pay for any given widget. The timing of attaining a widget is very relevant to price. One must realize that a second or tenth widget is less valuable to a person and at some point attaining another has zero to negative worth. All this to say that there is no set price for an item, but people set prices to maximize their profit from any given widget. |  |
