Textbook Problem

Adam Smith's “invisible hand" refers to

a. the subtle and often hidden methods that businesses use to profit at consumers' expense.

b. the ability of free markets to reach desirable outcomes, despite the self-interest of market participants.

c. the ability of government regulation to benefit consumers, even if the consumers are unaware of the regulations.

d. the way in which producers or consumers in unregulated markets impose costs on innocent bystanders.