How does price serve as a signal to resource owners?

While consumers decide that a good or service is much more appealing than before, demand rises.  This makes a shortage at the original equilibrium price, putting upward pressure on price.  The higher price raises the amount of profit firms can earn, and provides them along with an incentive to produce more.  So, resource prices are bid up to attract much more resources to the firms.  The end result is a movement of resources into the industry.