Final answer:
The invisible hand drives the market toward the price of market equilibrium, where demand matches supply. This self-regulating market mechanism allows for efficient resource allocation and informs buyers and sellers through price adjustments.
Step-by-step explanation:
The invisible hand is a concept coined by economist Adam Smith, and it essentially refers to the self-regulating behavior of the marketplace. When the question asks what the price is toward which the invisible hand drives the market, it is referring to market equilibrium. This is the price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, effectively balancing out demand and supply.
The idea is that individual market participants, each acting in their own self-interest, can often lead to the most efficient allocation of resources, without the need for central planning or intervention. When something disrupts the market, such as excess supply, market forces naturally adjust the price to a level where supply meets demand, even if that means selling at below the cost of production temporarily. This process is seen in examples like going-out-of-business sales or adjustments in international markets responding to an oversupply of goods. These price adjustments help communicate essential information to both buyers and sellers, allowing them to make informed decisions.