Question

Adam Smith's theory of capitalism includes which of the following elements?

A. Consumers being protected from corporate exploitation
B. Competition between companies for customers and profits
C. Governments establishing monopolies for business
D. Regulations preventing companies from polluting the environment

Answer 1

Answer is C. Governments establishing monopolies for business

Answer 2

B. Competition between companies for customers and profits.

Step-by-step explanation:

One of the most important elements of Adam Smith's theory of capitalism is the element of competition. In his theory, companies compete both for consumers and profits, following the laws of supply and demand. Supply and demand determines who is successful and who is not, and in this way, the market regulates itself. This is the basis for the idea of a free market.