Where Do Prices Come From?

An essay by economist Russ Roberts on where prices come from. I've always thought of prices being driven by demand. But of course, supply and the cost of providing the good plays an important role in prices too:

Why are red peppers consistently more expensive than green peppers? Why should there be any relationship between the two prices? Green peppers are used in a lot of industrial cooking for their intense flavor. Shouldn’t they be more expensive? It turns out that a red pepper is a ripe green pepper. A seller always prefers money today to money tomorrow because money today can be invested in the meanwhile to earn interest. So if green peppers and red peppers sell for the same price, no seller would be willing to supply a red pepper. So red peppers must sell for more.