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The idea that buyers, through their spending choices, ultimately decide which goods are produced and in what quantities is known as:
ACollective ownership
BFreedom of enterprise
CProfit motive
DConsumer sovereignty
Answer & Solution
Correct answer: D. Consumer sovereignty
1. Consumer sovereignty means consumers determine production through their purchases.
2. Under capitalism the consumer is treated as king.
3. This matches the definition of consumer sovereignty.
4. Profit motive drives producers and collective ownership is a socialist trait, so neither fits.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit II "Basic Problems of an Economy and Role of Price Mechanism", p.2_
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