• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Outline how consumer sovereignty determines patterns of production in an economy and discuss the factors that influence consumer choice.

Extracts from this document...

Introduction

Outline how consumer sovereignty determines patterns of production in an economy and discuss the factors that influence consumer choice. Consumer sovereignty is an economic term for the concept that, in a free market, consumers determine the goods that are produced; this makes them "sovereign" over production in an economy. The theory of consumer sovereignty says that, while businesses and companies can produce anything they choose, if consumers do not want or need a product, it will not sell. If a product is not sold, it will not continue to be produced. ...read more.

Middle

Thus, as an economy experiences an upturn and consumer incomes rise, the production of luxury goods will increase. Similarly, the production of these items will decrease in economic downturn. There are four main factors that influence consumer choice. They are personal factors, economic factors, social factors, and marketing. Personal factors influencing consumer choice are about the consumer's own preferences, wants and needs. An individual has his/her own personal tastes or preferences and this influences the choices they make when the consume income. Personal factors also include personal wants and needs. An individual will purchase necessities rather than wants, as necessities are essential. ...read more.

Conclusion

Economic Factors include the level of income and availability of credit. And individual with a higher level of income is more likely to spend on luxury goods, than a person on a lower level of income, who might only spend their income on necessities. Marketing refers to advertisements that a consumer may be exposed to which in turn will influence a consumers choice. Advertisements use different strategies to motivate consumers to buy particular goods and services. All these factors contribute to the influencing of consumer choice. Consumers choose what products to buy, and therefore determine patterns of production in an economy. ?? ?? ?? ?? Katherine Ly- Economics ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Chinese economy sets for soft landing in 2005.

    "If inflation does build up and the inflation rate goes higher than 5 per cent, the authorities will have to slam on the brakes harder, of course. When they do that, soft landing becomes a bit rougher. It's very hard to quantify, but that's our basic outlook," said Thomas J.

  2. Free essay

    Globalisation & changing career patterns

    colleagues across the globe is as easy as communicating with a colleague on the floor below. The need to maximise profit by organisations, led them to look at ways of saving costs whilst continuing to provide key services to customers.

  1. Scarcity and Unlimited Wants.

    * Farming areas employ few people. * Industry is concentrated in towns. 80 per cent of the UK population live in England, largely in the south-east and midlands. 80 percent of people live in urban (built-up) areas. 20 cities have a population of more than 250 000.

  2. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    However, recent studies suggest that differences between average country and average industry correlations are narrowing. As mentioned above, Rouwenhorst (1999) for example found that the average increase in correlations for countries is higher than for industries. And from the results of Ferreira (2003), it can be conducted that the ratio

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work