ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Consumer sovereignty is an economic concept where the consumer has some controlling power over goods that are produced, and the idea that the consumer is the best judge of their own welfare. The concept of consumer sovereignty has in fact given rise to the concept of a market economy system.

Detailed explanation-2: -Consumer sovereignty is the principle that consumers, through their purchasing decisions, determine the demand for goods and services, and therefore have a powerful influence on what is produced and how it is produced.

Detailed explanation-3: -Consumer’s sovereignty is limited by unequal income distribution in a capitalist society. The consumer who is poor has a limited choice of products. His wants remain unsatisfied. It is only the rich consumer who can choose from a variety of products.

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.

Detailed explanation-5: -Definition producer sovereignty This is when firms have the power and ability to influence consumer decisions. For example, in a monopoly consumers have no choice and have to pay the price and buy the goods offered by firms. Producer sovereignty means that it is firms who will decide what to do.