Economic Definition of consumer sovereignty. Defined.
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Term consumer sovereignty Definition: The notion that consumers are "king" of the economy because they're the ones who will ultimately determine what goods are produced and how our limited resources are used (that is, the three questions of allocation). Like most "notions" this one has a fair amount of validity, but also a notable exception. On the validity side, businesses can produce whatever goods that they please, but consumers won't buy them if they don't want them. If consumers don't buy, then businesses close their doors and resources are diverted (ultimately) to the production of goods that consumers do want. On the exception side, consumers may not know what sorts of goods they actually want and may be easily swayed into buying something that the don't want.