Why do Austrians say price is set by preference rather than production cost?

Also, visit this topic. The quoting system became broken a while back, but you can manually fix it each time. It will make your posts much more readable:

https://forum.freecapitalists.org/t/how-to-quote-a-post-in-a-reply-on-the-mises-forums/13847

Here is the Salerno speech I mentioned (on Preference/Value Scales), he starts talking about them around the 36 minute mark, but I would recommend watching the entire speech:

http://mises.org/media/4486/Scarcity-Choice-and-Value