The invisible hand works well, even if markets are not competitive.

Question

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The invisible hand theory suggests that the market automatically regulates itself to produce the most efficient outcome for society. However, this assumes that markets are competitive and there are no externalities. If markets are not competitive, the invisible hand may not work as efficiently, as monopolies or oligopolies may be able to manipulate prices and restrict output. Furthermore, externalities such as pollution can result in market failure, which means that the market fails to allocate resources efficiently. Therefore, the invisible hand theory may not hold in all situations, especially when markets are not perfectly competitive.

The Invisible Hand Works Well, Even If Markets Are Not