When buying or selling a commodity with known characteristics,the invisible hand will produce an outcome that ________ and where production costs are ________.

Question

Quizplus · Accepted Answer

The invisible hand refers to the market forces of supply and demand. When buying or selling a commodity with known characteristics, the market forces will naturally lead to an outcome that maximizes economic surplus (the difference between the willingness to pay and the actual price paid) as both buyers and sellers strive to maximize their own self-interests. At the same time, production costs will be minimized as producers compete with each other to offer the lowest cost for the commodity. Therefore, the best choice is A, which correctly identifies that the outcome will maximize economic surplus and minimize production costs.

When Buying or Selling a Commodity with Known Characteristics,the Invisible