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Self-interest and competition, in accordance with Adam Smith, function as invisible hands that direct businesses in a market-based economy.

What is self-interest?

Self-interest is commonly defined as a focus on one's own needs or interests. Self-interested behaviors are typically carried out unknowingly most of the time. Numerous philosophical, psychological, and economic theories look at how self-interest influences how people behave.

  • Adam Smith authored one of the most well-known works on economics, which is still used today to explain how the American economy is structured.
  • Smith writes in Wealth of Nations about the need for essentially zero government involvement in the economy.
  • Instead, the best outcome for customers will come through business rivalry. Smith bases his assertion that businesses will act in their own best interests on this theory.

Since the business owner depends on customers to succeed, acting in their best interest will inevitably lead to the best deals for the consumer.

Thus, the correct option is  3.

Learn more about Self-interest and competition:

https://brainly.com/question/23874290

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