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 major role of consumers in determining what goods are produced.

Question

Quizplus · Accepted Answer

Consumer sovereignty means that consumers determine what goods and services are produced through their purchasing decisions. Producers are incentivized to produce what consumers demand in order to make a profit, and this is what guides the allocation of resources in the market system. Therefore, D is the best choice because it accurately reflects the role of consumers in determining what goods are produced.

The Market System Is Said to Be Characterized by "Consumer