Consumer Sovereignty Drives Production

Steps:

• Recall that a market economy relies on supply and demand, not central planning.
• Identify the key mechanism: prices signal what consumers want through their purchasing decisions.
• Evaluate choices: consumers influence demand, while others play secondary roles.
• Confirm: production aligns with consumer preferences to maximize profits.

Why A is correct:

• In a market economy, consumer sovereignty means buyers' demand determines production via price signals, as defined by Adam Smith's "invisible hand."

Why the others are wrong:

• B: Employers respond to consumer demand but do not initiate it.
• C: Government intervenes minimally in pure market economies, unlike command systems.
• D: Trade unions affect wages and conditions, not overall production decisions.

Final answer: A