--%>

Competition and the Invisible Hand

Elucidate: Competition and the “Invisible Hand”?

E

Expert

Verified

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.

   Related Questions in Business Economics

  • Q : Illustrate Scarcity and choice of

    Illustrate Scarcity and choice of Economic Perspective?

  • Q : Analysis of US GDP and GDP growth rate

    You may use a calculator and MINITAB to conduct the necessary calculations for all questions.  Analysis of US GDP and GDP growth rate (1959-2004). The following variables can be retrieved from MIN

  • Q : Decreases in opportunity costs of

    The opportunity costs of production and consumption for most resources and goods tend to be decreased by: (w) private monopoly power. (x) price floors. (y) intense competition. (z) price ceilings. Hey friends pleas

  • Q : What are the facts of inflation What

    What are the facts of inflation?

  • Q : Introduction of the term Risk factor

    Give a brief introduction of the term Risk factor?

  • Q : Perfectly competitive market and its

    Which of the given is not a characteristic of a perfectly competitive market structure: w) there are a very huge number of firms which are small compared to the market. x) All firms sell the same products. y) There are no restrictions to entry through

  • Q : Real rate of interest Question: Hubbard

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  • Q : Distinguish between allocative

    Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency?

  • Q : Theory of Purchasing Power Parity

    Question: The Theory of Purchasing Power Parity says that, in the long run, nominal exchange rates change to offset changes in relative i. _________________________ so that the purchasing power of two currencies st

  • Q : Describe Financial Leverage Briefly

    Briefly describe Financial Leverage? In what manner it is calculated? What does low or high financial leverage signify?