Asked by Maanasi Radhakrishnan on May 16, 2024
Verified
The dollar votes of consumers ultimately determine the composition of output and the allocation of resources in a market economy. This statement best describes the concept of
A) derived demand.
B) consumer sovereignty.
C) the invisible hand.
D) market failure.
Dollar Votes
The concept that consumers "vote" for the products they prefer through the dollars they spend.
Consumer Sovereignty
The concept that consumers have the ultimate control over what goods and services are produced by choosing what to purchase with their money.
- Acquire knowledge about the notion of consumer sovereignty and how it influences the production process of goods and services.
Verified Answer
KL
komal lubanaMay 18, 2024
Final Answer :
B
Explanation :
Consumer sovereignty refers to the idea that consumers have the power to determine which goods and services will be produced through their purchasing decisions. In a market economy, firms will produce the goods and services that consumers demand, and resources will be allocated based on consumer preferences. Therefore, the statement best describes the concept of consumer sovereignty.
Learning Objectives
- Acquire knowledge about the notion of consumer sovereignty and how it influences the production process of goods and services.