What are the roles of markets and prices in an economy?

What will be an ideal response?

Markets are a means by which scarce resources are allocated. Through them buyers and sellers carry out voluntary exchange. Prices are important in that they provide the incentives to which buyers and sellers respond. A relatively high price for a good will discourage consumption and encourage production of the good. On the other hand, a relatively low price will encourage the consumption and discourage the production of a good.