What is consumer sovereignty?

Consumer sovereignty is a concept that reflects the power and control consumers have in determining what goods and services are produced in a market economy. It suggests that consumers, through their purchasing decisions, have the ability to influence the types of products and services offered by businesses.

In a market economy, businesses respond to the demands and preferences of consumers by adapting their production and marketing strategies to meet those needs. This is known as the "consumer-driven" economy, where consumer preferences and choices are seen as the driving force behind economic activity.

Consumer sovereignty is often considered a central tenet of a free market economy, as it promotes competition, innovation, and efficiency. By allowing consumers to freely choose what they want to buy, businesses are incentivized to create better products, improve quality, and offer competitive prices in order to attract customers.

Overall, consumer sovereignty empowers individuals to make choices that align with their preferences, needs, and values, ultimately shaping the market dynamics and influencing the direction of the economy as a whole.