I have a basic question: my understanding is that in a market economy, economic decisions are governed by prices, i.e prices signal what should be produced & how much. This is opposed to central planning, where a committee decided what should be produced & how much.
Now, in companies or households, such economic decisions are made by "central planning": i.e. - the CEO/board, or parents. Why shouldn't prices be used at these levels too? For example, why don't companies create a "currency" and tell employees to work on things that people with more "money" (senior management) will buy? Or, in a family, for parents to create a "currency" and tell family members to work on things that others will pay for? (done in small ways in some families, but not with everyone participating).
Bottom line of the question: When is it better to use a "market economy" (with prices) as compared to central planning? Is it a function of size? I don't think so...