the manner in which the profits of goods or services affects the supply and demand of goods and services, principally by the price elasticity of demand.

There are four features of prise mechanism. They are:

There is no government interference in economic activates. Resources are owned by private economic agents who have the economic freedom to allocate scarce resources without interference from the government.
Goods and services are allocated on the basis of price --- a high price encourages more supply whereas a low price encourages consumer spending. Goods and services are sold to those who have the willingness and ability to pay.
The allocation of factor resources is based on financial incentives--- for example: agricultural land is used for harvesting crops with the greatest financial return, while unprofitable products are no longer produced.
Completion creates choice and opportunities for firms and private individuals. Consumers can thus benefit from a variety of innovative products, at completive prices and of high quality.

THE END

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