What is meant by price mechanism?

Price mechanism is a system under the free enterprise economy where resource allocation and prices are determined by the market forces of demand and supply.

Or

Price mechanism is a system  of economic organization where economic activities take place with limited government intervention.

It is otherwise known as “laissez faire” meaning no government intervention. It works only in free enterprise or capitalist economy where resources are owned by private individuals and companies which are free to take decisions regarding their utilization.