In the previous chapter, we studied how the interaction between demand and supply creates an equilibrium in a perfectly competitive market, and how this equilibrium is affected by shocks to supply or demand, or when we opened up to international trade. But we said nothing about whether the outcome is actually good for society. Is it economically sound that the price of electricity rises when there is little rainfall and cold weather sets in? Or that Conrad must reduce his production in response to international competition? In this chapter, we will get to know the invisible hand and introduce one of the oldest and most fundamental insights in economics: that a perfectly competitive market, under certain conditions, provides the best economic outcome for society.