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Consumer sovereignty


The proposition that consumers are the best judges of their own interest. This is the basis for leaving consumption patterns to be decided by the market; consumers face fixed prices of goods and services, which reflect the costs of production, and are left to maximize their own utilities by choosing whatever combinations of goods and services suit them best. As a positive statement, it describes what consumers are permitted; as a normative statement, it prescribes what consumers should be permitted.


Reference: Oxford Press Dictonary of Economics, 5th edt.