Originally Posted by u-Bob

Human are not perfect all knowing beings. No, they are imperfect. They do not know everything that goes on in the world. They do not know what other people are thinking. They do not know exactly how much of certain resource is available right now or will be available 5 days or 10 months from now. They do not know exactly how much of a certain product people will be buying next month. They don't know exactly how many visitors their websites will get. etc.

Every entrepreneurial activity (every investment of saved resources) is by definition speculative. To reduce risks, people gather information and to the best of their ability try to analyze that information.

Let's say your company produces product A and another company produces a totally different product B. Your company is the only one on the market that sells product A (or anything even remotely similar). People like product A and you (being the only one selling it) charge a high price for it and as a result you make a huge profit. The company that produces product B however has very few customers and looses money.

Is this good? Yes it is. Prices mean something, they have a "signal function" in the market economy. The fact that you can charge a high price for product A and that people value product A enough to pay that price for it sends a message to other actors (entrepreneurs) in the market economy. They too will want to make a huge profit and will start producing products that are similar to product A (products that perform the same function or some of the same functions or solve the problems that product A solves in an alternative way). The result is that supply of product A goes up and prices come down. Society as a whole benefits from this because now more people will be able to buy product A and they'll be able to buy it at a lower price. Society also benefits in other ways: no one in his right mind will start investing his resources in producing a product like product B because they now already now that people weren't interested in that product.

Prices help distribute/ration resources that are already available.
Example: Let's say a copper mine in Brazil collapses during an earthquake. The total amount of copper available decreases. The price of copper goes up. Every company around the world that uses copper in the production of whatever it is they are producing now knows there's less copper available and they can adjust their production accordingly.

The most important purpose that prices serve whoever is in the coordination of the future rationing of resources. As I've shown in my product A vs product B example, it's is because a company was able to make a huge profit selling product A, that other actors in the market were able to figure out what the public wanted.