Explain how market forces (the invisible hand) guide consumers and producers toward the equilibrium. This requires a complete explanation of why the intersection of supply and demand is the equilibrium. Use supply and demand diagrams for a graphical presentation of your arguments. The graphs and your explanation should complement each other. Explain how the same process you described in previously could result in the socially optimal outcome. Furthermore, graphically show that any deviation from the equilibrium of a free and competitive market reduces social welfare. In what situations is the free market outcome is not socially optimal?