According to Adam Smith and other economists, the minimization of total costs in a competitive industry:
A) results from the conscious actions of well-intentioned central planners.
B) results from resources being effectively allocated by trade boards.
C) is neither planned nor intended but results from individuals pursuing their own self-interest.
D) arises from a high level of cooperation among businesses, in terms of input and output plans.

Question

Quizplus · Accepted Answer

Adam Smith and other economists believe in the concept of the invisible hand, which states that individuals pursuing their own self-interest will unintentionally promote the greater good of society by minimizing total costs. This means that in a competitive industry, businesses will naturally seek to minimize their costs to gain a competitive advantage, which ultimately benefits all consumers by providing lower prices and higher quality products. The minimization of costs is not a central planned action or a result of trade boards but emerges spontaneously as a result of the market forces of supply and demand. Cooperation among businesses may occur, but it is not necessary for cost minimization.

According to Adam Smith and Other Economists, the Minimization of Total