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Price has the primary role of conveying information to not only the producers, but also the consumers.

Consumers use price signals as the opportunity cost of a purchase, while producers use price signals to appeal to the consumers wants.

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Prices function as an incentive; therefore, rising prices motivate firms to produce more, while falling prices motivates firms to cut back production or even leave a market.

Prices also motivate workers because the higher the prices the more people want to enter that particular workforce for the higher wages; instead of the market that produces lower wages.

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Prices allow markets to adjust quickly when major events interfere with the production or movement of supply.

When a major event occurs the market is thrown out of equilibrium and prices give markets the ability they need to reach equilibrium under these changing conditions.

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Producers use prices to guide resources to the goods most efficient uses.

Producers use these price signals to produce more of what is making the business money and producing less of what loses the business money.