The Invisible Hand Theorem shows that competitive markets create the maximum possible social gain,even when all interactions among the markets are taken into account.

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The Invisible Hand Theorem, proposed by economist Adam Smith, states that in a competitive market, the actions of self-interested individuals will naturally lead to an efficient allocation of resources and the maximum possible social gain. It is based on the idea that when buyers and sellers interact freely, prices will be determined by supply and demand, and resources will be directed towards their most valuable uses. Thus, competitive markets create a Pareto-efficient outcome, where it is impossible to make any one individual better off without making someone else worse off. The theorem has been widely accepted by economists and is considered a fundamental concept in the study of economics.

The Invisible Hand Theorem Shows That Competitive Markets Create the Maximum