According to the concept of the "invisible hand," if Susie opens and operates a proﬁtable childcare center, then
A) government should regulate the business to ensure quality.
B) the proﬁt Susie earns indicates that she is overcharging for her services.
C) she has served society's interests by providing a desired good or service.
D) this demonstrates that consumer sovereignty is not present in this market.

Question

Quizplus · Accepted Answer

The concept of the "invisible hand" suggests that individuals pursuing their own self-interest in a free market will ultimately lead to outcomes that benefit society as a whole. Therefore, if Susie opens and operates a profitable childcare center, it indicates that she has provided a desired good or service to consumers, and thus served society's interests. Government regulation may not be necessary if the market is functioning properly and allowing for competition and consumer choice. The fact that Susie is earning a profit suggests that she is pricing her services appropriately in response to market demand, rather than overcharging. The presence or absence of consumer sovereignty in this market is not directly relevant to the concept of the "invisible hand."

According to the Concept of the "Invisible Hand," If Susie