Which of the following holds true in a market when the invisible hand functions properly?
A)MC = MU = P
B)P = MRS
C)P = MC but not P = MU
D)P = MU but not P = MC

Question

Quizplus · Accepted Answer

In a market where the invisible hand functions properly, the price (P) equals the marginal cost (MC) of production, and this price also equals the marginal utility (MU) to consumers. This condition ensures that resources are allocated efficiently, reflecting Adam Smith's concept of the invisible hand guiding economic resources to their most valued uses.

Which of the Following Holds True in a Market When