The concept of the invisible hand suggests that ________.
A) individuals working for self-interest will eventually maximize the well-being of society
B) equilibrium in a competitive market is determined independent of demand and supply
C) government intervention is necessary to rectify market imperfections
D) the price mechanism allocates resources only to the people with high income in the country

Question

Quizplus · Accepted Answer

The concept of the invisible hand, proposed by Adam Smith, suggests that individuals pursuing their own self-interest in a competitive market will unintentionally promote the well-being of society as a whole. Through the price mechanism, resources are allocated efficiently and production is optimized, resulting in a better standard of living for everyone. Government intervention is seen as unnecessary, as the market can regulate itself through competition. The other options (B, C, and D) are not consistent with the concept of the invisible hand.

The Concept of the Invisible Hand Suggests That ________