Which of the following illustrates what happens when supply and demand work as they should, according to Adam Smith?

Question

Companies make more of a product even though few people buy it
Governments open new factories to meet demand for goods
There is enough supply of a given produt to meet consumer demands
Consumers make companies create new types of products

Answer 1

The statement that best illustrates what happens when supply and demand work as they should, according to Adam Smith, is:

There is enough supply of a given product to meet consumer demands.

This aligns with the concept of equilibrium in a free market, where supply meets demand, resulting in an efficient distribution of resources. Smith's ideas emphasize the natural regulation of markets through the interactions of supply and demand without excessive intervention.