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1. Nature of the economic system – In general, the consumer is more sovereign in a free market
oriented system where commodities are produced more in line with consumer preferences. In a
planned economic system less regard is given for consumer preferences since what is produced
is determined by a Central Planning Authority.
2. Size of the consumer's income – The power to determine what is to be produced depends on the amount of income that an individual consumer earns. The consumers who earn more are able to exercise more of this power since they are capable of bidding up prices of the type of goods they want; the demand of the low income earners is relatively less effective in influencing resource allocation. Thus, the larger the consumer's income the greater is the consumer's sovereignty since the consumer can afford to choose from a wider range of goods and services which he can buy.
3. Range of goods available – Depending on the technology available and ownership of productive
resources, consumers depend on the goods actually available in the market to satisfy their wants.
They cannot therefore reflect their preferences through price bidding of the required products
since such products may after all not be available in the market. The level of production may lag
behind consumer?s desires and therefore what is produced is not in accordance with
the nature of tastes and preferences.
4. Government policy – The consumption of certain goods may be prohibited by the government irrespective of the level of effective demand for them. The government usually prohibits
production or sale of certain products in public interest e.g. harmful drugs, pornographic
materials/literature. In this case, the consumer has no price bidding process power to influence
and determine production and distribution.
5. Standardization of goods – Production of standardized goods tends to be relatively cheaper to
manufacturers. Therefore, consumers may not influence what is to be produced as the standards
(in terms of type, content, design, etc.) are already set by manufacturers.
6. Existence of monopolies – A monopoly is said to exist where there is a single supplier of a
commodity with no close substitute. This monopoly power limits the ability of the consumer to
determine the type, quantity, quality and price of a commodity.
Wilfykil answered the question on February 4, 2019 at 10:03