After reading the Economics For Real People this what wasn’t really clear for me. I have no power over how much the utility company charges me for 1 kW of electricity - I cannot determine the unit price. OTOH I can reduce the number of kW I use or supply some of the kW I use from f.e. solar panels: I can decide the total price I’m willing to pay.
So the price signal system is about total prices, not unit prices?
Simplify by using a clearer example - something bought on the market. Say, paperclips. You would then be saying that you have no control over the unit price per paper clip - it’s set by the store, right? But, as you point out, you can use less paperclips. This reduces quantity demanded for paperclips, which does lower the unit price.
This is how the price signalling system works. If the price is set too high, people stop buying it - which sends the signal to the suppliers to either make less (if we also shift the supply curve, we could have an intersection at the original price but with lower quantity), or lower the price.
Similarly, if the price is set too low, this causes quantity demand to rise, which signals them to either make more or charge more.
Now, we apply it to changes in the world, which is what Hayek was talking about when he introduced this terminology. Suppose there is a shortage of iron, and as a result, iron has to be shifted from paperclips to more urgently demanded uses. What happens? Well, iron suppliers will start charging more for iron. Paperclip makers will then have to either make less paperclips, or charge more for them - which will decrease quantity demand, which will signal them to make less of them. Now, suppose the more urgent use of iron is for ventilators. The same effect takes place in the ventilator market, but much less drastically. If my hospital needs ventilators, we’ll economize on something else, like nursing salaries, and pay the higher price for the ventilators. Now, the hospitals, nurses, paperclip companies, and paperclip consumers might be entirely unaware of the iron shortage. Yet they are behaving in exactly the way that they need to in order to respond to that shortage - use less iron on paperclips, keep ventilators about the same, and economize on less urgent things for the hospital. So the price system has gotten them to behave the way they need to solely because of price changes.