Adam Smith's invisible hand only leads to an efficient outcome when
A)buyers are fully informed about all relevant aspects of a product and the market in which it is traded.
B)buyers collect information up to the point at which the marginal cost of having more information equals the marginal benefit of having more information.
C)buyers have more information about the product being traded than do sellers.
D)buyers have less information about the product being traded than do sellers.

Question

Quizplus · Accepted Answer

Markets only lead to an efficient outcome if buyers possess all relevant information about a product and the market, so that all associated benefits and costs are known.

Adam Smith's Invisible Hand Only Leads to an Efficient Outcome