First of all, before I will discuss this article, I will define first what is Economics and its kinds. Economics is the study of how the forces of supply and demand allocate scarce resources. Subdivided into microeconomics, which examines the behavior of firms, consumers and the role of government; and macroeconomics, which looks at inflation, unemployment, industrial production, and the role of government. In this news paper article, it talks about the condition of the consumer with the inflation of the price of the food or goods.
We as consumers, we are unique in many ways. We differ in our needs, wants and demands even in likes, dislikes, standards, lifestyles and traditions. Sometimes, our behavior as a consumer is hard to identify and measure. Our objective as consumers is to maximize our satisfaction given by our limited income. Since we care the ultimate purchasers of goods in the economic market, we have the power on what to produce according to our needs and even wants. In economics, it is called “consumer sovereignty” which is defined as the power of consumers to determine what goods and services are produced. The theory suggests that consumers, not producers, are the best judge of what products benefit them the most. Due to the fact that consumer markets depend so heavily on demand, producers must monitor the needs of these individuals if they want their products to have any chance at success. However, the power of the consumer has limitations especially in some kinds of markets, such as oligopoly and monopoly. In oligopolistic markets, independent suppliers (few in numbers and not necessarily acting in collusion) can effectively control the supply, and thus the price, thereby creating a seller's market. They offer largely similar products, differentiated mainly by heavy advertising and promotional expenditure, and can anticipate the effect of one another's marketing strategies. Monopoly on the other hand, market situation where one producer (or a...
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