Although this kid looks like he's about 12, he's correct. Milton Friedman had the best example of this with a pencil:
Look at this lead pencil. There’s not a single person in the world who could make this pencil. Remarkable statement? Not at all. The wood from which it is made, for all I know, comes from a tree that was cut down in the state of Washington. To cut down that tree, it took a saw. To make the saw, it took steel. To make steel, it took iron ore. This black center—we call it lead but it’s really graphite, compressed graphite—I’m not sure where it comes from, but I think it comes from some mines in South America. This red top up here, this eraser, a bit of rubber, probably comes from Malaya, where the rubber tree isn’t even native! It was imported from South America by some businessmen with the help of the British government. This brass ferrule? [Self-effacing laughter.] I haven’t the slightest idea where it came from. Or the yellow paint! Or the paint that made the black lines. Or the glue that holds it together. Literally thousands of people co-operated to make this pencil. People who don’t speak the same language, who practice different religions, who might hate one another if they ever met! When you go down to the store and buy this pencil, you are in effect trading a few minutes of your time for a few seconds of the time of all those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no commissar sending … out orders from some central office. It was the magic of the price system: the impersonal operation of prices that brought them together and got them to cooperate, to make this pencil, so you could have it for a trifling sum.
That is why the operation of the free market is so essential. Not only to promote productive efficiency, but even more to foster harmony and peace among the peoples of the world.
When you're at the store shopping for a pencil, you look at quality, and price. When quality is equal, you go for the cheapest. When you buy the cheaper, same quality product, you're telling the other pencil producer that they need to somehow optimize their pencil making process to meet or exceed their competitors.
When the government comes in, and say, uses price control to protect the US pencil market by setting a mandatory $1 per pencil floor, many people who wanted pencils may forgo it for use of a pen, a marker, or simply fewer pencils. This leaves more pencils on the shelf, less pencils in the hands of consumers, and less money in the pockets of pencil makers.
The information communicated through the free market is vital to all business worldwide, and is the fundamental basis of capitalism.