country. Finally, maximizing profits above all else could lead a company to act directly counter to the needs and interests of consumers, hurting them even though actions may be legal.

Question

What will be an ideal response?

Answer 1

Adam Smith’s broad recommendation for both business and government was to
adopt behaviors and policies that would maximize competition among businesses,
which would lower prices, raise the quality of products, and provide supply where it was needed most efficiently. The freedom of competition would apply to both products and labor. He argued that government regulation should be limited to those few situations in which a public good was needed but could not be supplied by private means, such as national defense, contract enforcement, or abuse by merchants in the name of competition. He also argued against the mistreatment of laborers on both moral grounds and that it would be self-defeating to any manager who did so.