The "invisible hand" in a competitive market pushes the firms in the market to
A)charge a price that is equal to their marginal revenue.
B)produce an output level that allows them to earn some positive economic profits.
C)use resources and produce output that maximize consumer and producer surplus.
D)operate where their individual demand curve is above their long-run average cost curve.

Question

Quizplus · Accepted Answer

The "invisible hand," a term coined by Adam Smith, refers to the self-regulating nature of the marketplace in guiding individuals and firms to unintentionally promote societal benefits by pursuing their own self-interest. This leads to the efficient allocation of resources and maximization of consumer and producer surplus, as firms produce the quantity of goods that consumers demand at a price that reflects the cost of production.

The "Invisible Hand" in a Competitive Market Pushes the Firms