The invisible hand refers to the
A) fact that the U.S. tax system redistributes income from rich to poor.
B) notion that, under competition, decisions motivated by self-interest promote the social interest.
C) tendency of monopolistic sellers to raise prices above competitive levels.
D) fact that government controls the functioning of the market system.

Question

Quizplus · Accepted Answer

The invisible hand is a concept in economics that suggests that, in a competitive market, self-interested behavior can lead to the most efficient use of resources and promote the well-being of society as a whole. This is because producers will seek to maximize profits, and consumers will seek to maximize their own utility, resulting in prices and quantities that reflect the true value of goods and services. This concept was popularized by economist Adam Smith in his book The Wealth of Nations.

The Invisible Hand Refers to the