Adam Smith taught that individual buyers and sellers who act in their own self interest frequently...

Question

Question

Adam Smith taught that individual buyers and sellers who act in their own self interest frequently promote societys interest

Answer 1

Answer #1

Assumptions that are needed for society's interest to be promoted :

1) There are no external benefits or costs, i.e. the market is producing at private market equilibrium.

2) Buyers and sellers can make informed decisions.

3) Markets are perfectly competitive, so that each buyer has complete information about the product and firms are producing homogeneous products.

Answer: option D

Answer 2

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