Economics JAMB

One of the criticisms of the price mechanism is that?

A. producers are sovereign
B. it provides low degree of freedom
C. it widens the inequitable gap
D. consumers are sovereign

Correct Answer:

Option A – producers are sovereign

Explanation

Price mechanism refers to the system where the forces of demand and supply determine the prices of commodities. This means that, prices are left in the fate of market forces negating the concept of consumer sovereignty.

Consumers are forced to purchase those goods which producers want. Thus, the producer is sovereign, not the consumer.

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