The market system is said to be characterized by "consumer sovereignty." This is because:
A)a large number of consumer goods are produced.
B)the prices of consumer goods are regulated by government.
C)consumer goods are more profitable than investment goods.
D)of the role of consumers in determining what goods are produced.

Question

Quizplus · Accepted Answer

Consumer sovereignty means that consumers play the dominant role in determining what goods and services are produced in the market system, through their choices of what to buy and not buy. Producers are incentivized to produce what consumers want because that is what generates profits for them. Therefore, D is the correct choice because it describes the role of consumers in determining what goods are produced. A, B, and C are incorrect because they do not accurately define consumer sovereignty.

The Market System Is Said to Be Characterized by "Consumer