In the absence of externalities, the "invisible hand" leads a market to maximize
A)producer profit from that market.
B)total benefit to society from that market.
C)both equality and efficiency in that market.
D)output of goods or services in that market.

Question

Quizplus · Accepted Answer

The "invisible hand" theory, introduced by Adam Smith, suggests that in a free market, individuals pursuing their own self-interest will unintentionally benefit society as a whole. In other words, the market will maximize total benefit to society from that market as individuals compete to produce goods and services that are desired by consumers at the lowest possible cost. Therefore, choice letter B is the best answer.

In the Absence of Externalities, the "Invisible Hand" Leads a Market