Final answer:
Invisible distribution channels suggest high efficiency within the market, akin to the invisible hand concept in economics. However, the assumptions for an invisible hand to work—perfect competition, full market information, and self-interest leading to equilibrium—are rarely met in reality, leading to a difference between theory and actual economic conditions.
Step-by-step explanation:
If distribution channels are invisible, it often implies that they are seamlessly integrating and functioning efficiently within the market without drawing attention to any issues or inefficiencies. The concept of the invisible hand, introduced by Adam Smith, suggests that individuals pursuing their self-interest inadvertently contribute to the overall good of society through a natural mechanism in the economy.
For the invisible hand to work effectively in the economy, certain assumptions must be believed to be true: perfect competition where buyers and sellers have full market information, no single entity has the power to influence market prices, and individuals act in their self-interest leading to supply and demand equilibrium. However, these assumptions have limitations in the real world due to market imperfections such as monopolies, misinformation, and externalities.
Consequently, while distribution channels might appear efficient when they're invisible, this ideal state is based on assumptions that are often not fully met in the actual economy, leading to potential discrepancies between theoretical efficiency and practical realities.