BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Consumer has the power to decide what goods to be produced
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Consumers send signals to producers through their demand
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Business decides what they want to produce
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Producers produce g/s they think has highest demand
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Detailed explanation-1: -Answer and Explanation: The statement, “Consumer sovereignty is the power of governments to decide what gets produced, ” is False.
Detailed explanation-2: -The idea that consumers influence production decisions is called consumer sovereignty. Consumers effectively “vote” for the goods they want with their spending power, causing firms to respond to consumer preferences and produce the goods they demand.
Detailed explanation-3: -Which one is not part of the definition of consumer sovereignty? Consumers have not part in the production of goods produced.
Detailed explanation-4: -Consumer sovereignty (demand) determines the types and quantities of goods to be produced given the scarce resources of the economy. Consumers spend their income on the goods and services that they most want. In doing so, they SHOW producers what they want.