"The 'dollar votes' of consumers ultimately determine the composition of output and the allocation of resources in a market economy." This statement best describes the concept of:
A)derived demand.
B)external costs and benefits.
C)consumer sovereignty.
D)the invisible hand.

Question

Quizplus · Accepted Answer

Consumer sovereignty is the idea that consumers, through their purchasing decisions, have ultimate control over what goods and services are produced in a market economy. This is because producers will cater to the demands of consumers in order to maximize profits. Therefore, the "dollar votes" of consumers refer to the power that consumers have to shape the economy through their purchases.

"The 'Dollar Votes' of Consumers Ultimately Determine the Composition of Output