ECONOMICS
CONSUMERS
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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: -So, let’s now look at a clear definition of what consumer sovereignty really is. Consumer sovereignty is the idea that consumers hold the power to influence production decisions, based on what goods and services they purchase. It is thought that consumer preference will influence what firms decide to produce.
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.