Consumer sovereignty
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Consumer Soveriegnty is refered to in yr 9 Commerce so please make sure you know it. Consumer sovereignty is a term which is used in economics to refer to the disputed notion of the rule or sovereignty of purchasers over producers in markets.
Those with money and other assets are able to use their purchasing power to tell producers of goods and services what to produce (and how much). Customers do not necessarily have to buy and, if dissatisfied, can take their business elsewhere, while the profit-seeking sellers find that they can make the greatest profit by trying to provide the best possible products for the price (or the lowest possible price for a given product). In the language of cliché, "he who pays the piper calls the tune."
To most neoclassical economists, consumer sovereignty is an ideal rather than a reality because of the existence -- or even the ubiquity -- of market failure. Some economists of the Chicago school and the Austrian school see consumer sovereignty as a reality in a free market economy without interference from government or other non-market institutions, or anti-market institutions such as monopolies or cartels. That is, alleged market failures are seen as being a result of non-market forces. However, it has also been argued (e.g., by Goutam U. Jois) that even a "pure" market system violates the consumer sovereignty norm.
Does the doctrine of consumer sovereignty imply that the consumers of labor (the employers) are the sovereigns over the time supplied by workers? The neoclassical school, would argue no since workers can choose which employer to work for (as long as the employer will have them). Since the demand for labor is a derived demand what workers produce and how they do it is a direct result of the demand for products, and thus they are sovereigns, albeit at secondhand. Conversely, the Marxian school argues that the concentration of purchasing power in the hands of a small minority (the capitalists) means that the bourgeoisie is the sovereign in both product and labor markets. This is reinforced by the normal existence of the "reserve army of labor" which restricts workers' ability to choose between jobs.
