Competition and the Invisible Hand
Elucidate: Competition and the “Invisible Hand”?
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A. Competition is the mechanism of control for the market system. It not only guarantees that industry responds to consumer wants, but to adopt the most efficient production techniques it also forces firms.
B. Adam Smith talked of the “invisible hand” which promotes public interest through a market system where the primary motivation is self interest. Firms will also be producing the goods and services most wanted by doing maximize profits of society.
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The competitive market system is least probable to be allocatively unproductive as a result of: (w) externalities and public goods. (x) cutthroat competition and the outsourcing of low-wage jobs to less grown countries. (y) the underproduction of a go
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