Consumer sovereignty means that________________?
Correct answer: D. all of the above
- A. production depends on supply and demand
- B. consumers create demand
- C. producers supply what is demanded
- D. all of the above
Explanation
Consumer sovereignty means that consumer demand guides what firms produce, while producers respond by supplying the goods consumers want. Thus demand influences production, and all three statements together express this relationship.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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