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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