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The concept that under a system of free enterprise, it is consumers who decide what goods and services shall be produced and in what quantities is known as
- a)Consumer protection
- b)Consumer's decision
- c)Consumer preference
- d)Consumer's sovereignty
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
The concept that under a system of free enterprise, it is consumers wh...
d) Consumer's sovereignty.
Under a system of free enterprise, also known as a market economy, it is the consumers who determine what goods and services are produced and in what quantities through their purchasing decisions. This concept is known as consumer sovereignty. Consumers have the freedom to choose what they want to buy, and their choices influence the decisions of producers and the direction of the economy. Producers must offer products and services that are attractive to consumers in order to be successful and make a profit. Therefore, the preferences and decisions of consumers play a key role in shaping the market and the economy.
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The concept that under a system of free enterprise, it is consumers wh...
Explanation:
Free enterprise is an economic system in which private individuals or businesses have the right to own property and make a profit with little government intervention. Under this system, the concept of consumer sovereignty is significant as it determines what goods and services will be produced and in what quantity.
Definition of Consumer Sovereignty:
Consumer sovereignty is the concept that consumers are the ultimate decision-makers in an economy. They determine what goods and services are produced by expressing their preferences through their purchases. In other words, consumers' preferences and choices determine what products are produced and how much of it is produced.
How does Consumer Sovereignty work in a Free Enterprise System?
Under free enterprise, producers can only make a profit if they produce goods and services that consumers are willing to buy. Therefore, producers must pay attention to consumer preferences and adjust their production accordingly. If they fail to do so, they will not be able to sell their products, and they will eventually go out of business.
Example:
For instance, if consumers have a preference for electric cars over gasoline cars, producers will recognize this demand and produce more electric cars. As a result, the production of gasoline cars will decline. If consumers prefer organic food, producers will produce more organic food to meet the demand. If consumers prefer streaming services to cable television, producers will reduce the production of cable television and increase the production of streaming services.
Conclusion:
The concept of consumer sovereignty is critical in a free enterprise system. It ensures that producers cater to the preferences of consumers and produce goods and services that meet their needs. In this way, the free enterprise system is self-regulating and efficient, as producers who fail to meet consumer preferences will eventually go out of business.
Free enterprise is an economic system in which private individuals or businesses have the right to own property and make a profit with little government intervention. Under this system, the concept of consumer sovereignty is significant as it determines what goods and services will be produced and in what quantity.
Definition of Consumer Sovereignty:
Consumer sovereignty is the concept that consumers are the ultimate decision-makers in an economy. They determine what goods and services are produced by expressing their preferences through their purchases. In other words, consumers' preferences and choices determine what products are produced and how much of it is produced.
How does Consumer Sovereignty work in a Free Enterprise System?
Under free enterprise, producers can only make a profit if they produce goods and services that consumers are willing to buy. Therefore, producers must pay attention to consumer preferences and adjust their production accordingly. If they fail to do so, they will not be able to sell their products, and they will eventually go out of business.
Example:
For instance, if consumers have a preference for electric cars over gasoline cars, producers will recognize this demand and produce more electric cars. As a result, the production of gasoline cars will decline. If consumers prefer organic food, producers will produce more organic food to meet the demand. If consumers prefer streaming services to cable television, producers will reduce the production of cable television and increase the production of streaming services.
Conclusion:
The concept of consumer sovereignty is critical in a free enterprise system. It ensures that producers cater to the preferences of consumers and produce goods and services that meet their needs. In this way, the free enterprise system is self-regulating and efficient, as producers who fail to meet consumer preferences will eventually go out of business.
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The concept that under a system of free enterprise, it is consumers who decide what goods and services shall be produced and in what quantities is known as a)Consumer protection b)Consumers decision c)Consumer preference d)Consumers sovereigntyCorrect answer is option 'D'. Can you explain this answer?
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