Question

What is consumer sovereignty? A. It is the right of consumers to lodge complaints against fraud and misconduct. B. It is the control exercised by consumers’ preferences on the production of goods. C. It is the ability of a producer to respond to consumers’ needs and preferences. D. It is the recall of consumer products deemed unfit for consumption.

Answer 1

Letter B. It is the control excercised by consumer's preferences on the production of goods.

Consumer sovereignty is the idea that it is consumers who influence production decisions. The spending power of consumers means effectively they ‘vote’ for goods. Firms will respond to consumer preferences and produce the goods demanded by consumers. It is related to economics.

Example: Firms may market new goods successfully like an iPod. But, if consumers are not impressed the good will not sell. There are countless new products, which never catch off.

Note: In a free market, consumers have greater levels of consumer sovereignty.