>Prices are formed by supply and demand.
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the complex set of interactions amongst all of individuals (consumer and worker) and businesses, known formerly as "supply and demand", may have some effect on price determination.
but from experience in the business world, at least for new or updated products, price is determined by an individual (or individuals), known formerly as "the owners", who look at existing prices and then attempt to charge the maximum value they think the market will bear, assuming they can cover their own costs to make the widget, known formerly as "commodity". Upon (re-)entering the market and following sales for X months, prices and manufacturing methods are changed in order to maintain the books in the black, known formerly as "extracting surplus value". Red allowed only at owner and stockholder discretion (known formerly as "ownership of the means of production"). In case of red (or low values of black), any number of devices are utilized for movement into the black, including reduction in prices, increase in prices and cosmetic changes, increased advertising, lawsuits against competition, unfair labor and production practices, congressional lobbying and golf trips with Presidents to influence market and production factors which work in the owners (err CEO and stockholders) favor, etc, all formerly known as "control of the means of production".
I suppose in some statistical, stochastic process sense, there is some shadown of a law of supply and demand, as a near-equilibrium functional relationship between some kind of measurement indicative of a clamoring for cookies (formally known as demand) and a propensity to produce them (formally known as supply).. Damned if i ever seen anyone prove such a relationship. At least, in the intro econ books i seen, the laws of supply and demand are such straight damned lines thru purported data points, they is hard to believe. And why they always show plots for milk and cookies, never any real commodites (errr widgets) of interest???
les schaffer