how and whya system of freely fluctuating prices works to coordinate economic activity among millions of people through the allocation of "scarce resources that have alternative uses?"

Please use the following two ideas as an organizing principle.

1. "Prices are like messengers conveying news."
2. "Knowledge is one of the most scarce of all resources and a pricing system economizes on its use by forcing those with the most knowledge of their own particular situation to make bids for goods and resources based on that knowledge."