How does consumer choice differ from consumer sovereignty in a market system?
Please provide the best answer for the statement.
Consumer choice by itself refers only to consumers’ freedom to choose what they are willing and able to buy from what is available. Consumer sovereignty that exists in a market system goes one crucial step further. It means that producers respond to the choices that consumers make. If consumer demand declines for a particular product, that decreased demand will be reflected in prices and quantity produced. If consumer demand increases, that also will be reflected in terms of prices and quantities produced. In a centrally planned system changing consumer demand is largely ignored in favor of planners’ decisions which focus on the state’s goals rather than consumer wishes.
You might also like to view...
Compared to a barter economy, an economy that uses money will
A) be greedier. B) be poorer. C) have more corruption. D) have more output.
When the interest rate on alternative investments rise, it becomes costly for the bondholders to retain their bonds with them
a. True b. False Indicate whether the statement is true or false
If a firm in a competitive industry is making no profit but still producing, it must be the case that
a. MC = MR > ATC b. MC = MR < ATC c. MC = ATC > MR d. MC = MR = ATC e. this situation is not possible
The accelerator is an integral part of
a. externally generated cycles b. the war-induced cycle c. the housing cycle d. the innovation cycle e. internally generated cycles