The invisible hand works best in:
A) monopoly markets.
B) oligopoly markets.
C) cartels.
D) competitive markets.

Question

Quizplus · Accepted Answer

The invisible hand works best in competitive markets where there are many buyers and sellers competing with each other. In a monopoly market, there is only one seller who has complete control over the price and output. In an oligopoly market, a few large firms dominate the market and can collude to control prices. In a cartel, a group of firms collude to control prices and output. In these types of markets, the invisible hand may not work effectively to allocate resources efficiently. Therefore, competitive markets are the best choice for the invisible hand to work effectively.

The Invisible Hand Works Best In