Question

He [the producer] intends only his gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. What is the "invisible hand" referred to in this statement?
a) the elasticity of the market demand curve.
b) the power of government when decisions are made democratically.
c) the incentive structure accompanying market prices.
d) the guidelines and regulations set for his industry by the government.

Answer 1

Answer:

c) the incentive structure accompanying market prices.

Explanation:

The invisible hand explains the unintentional social advantages of ego-interested actions of people, a term first proposed by Adam Smith in The Theory of Moral Sentiments, published in 1759, referencing it with respect to the distribution of revenues.Administrators offer multiple incentives, that are bonuses or encouraging variables that push the person to function effectively and in the long term interest of the principal. The incentive structures contain price / referral fees, annual bonuses and compensation for performance