Final answer:
In a system of pure competition, consumer sovereignty is greatest because buyers have the power to determine prices through their purchasing decisions. Limited price variation restricts actual choice.
Step-by-step explanation:
In a system of pure competition, consumer sovereignty is considered greatest because buyers have the power to determine prices through their purchasing decisions. Even though consumers rely on producers' set prices, the intense competition among sellers in a pure competition market ensures that prices are driven by the choices made by buyers.
Since identical products are sold in a system of pure competition, buyers have limited variations in price, and this restricts their actual choice. For example, if two products are identical, a buyer's decision is typically based solely on the price since there are no other distinguishing factors.