According to Adam Smith, what drives businesses to make their prices attractive to consumers?

• A. Altruism towards society
• B. Random chance
• C. The pursuit of self-interest
• D. Government regulation

Answer: (C)

Verified step by step guidance

1. Understand the context of Adam Smith's economic philosophy, which centers on the idea of self-interest as a primary motivator in markets.
2. Recognize that Adam Smith argued businesses aim to maximize their own benefit, which leads them to set prices that attract consumers.
3. Identify that this behavior is not driven by altruism or random chance, but by the desire to increase profits through appealing prices.
4. Note that government regulation is a separate factor and not the primary driver according to Adam Smith's theory.
5. Conclude that the pursuit of self-interest motivates businesses to make their prices attractive to consumers, aligning with Adam Smith's concept of the 'invisible hand'.