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In economics, the consumer is the individual or household who purchases goods and services.

Sovereignty of the Consumer

All business persons are subject to the sovereignty of the consumer. As soon as an entrepreneur or capitalist ceases to serve the consumer better than his peers, he loses his position and suffers losses. To quote Ludwig von Mises:

"[Consumers] buying and their abstention from buying decides who should own and run the plants and the farms. They make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities...Only the sellers of goods and services of the first order are in direct contact with the consumers and directly depend on their orders. But they transmit the orders received from the public to all those producing goods and services of the higher orders...The consumer is in a position to give free rein to his caprices and fancies. The entrepreneurs, capitalists, and farmers have their hands tied; they are bound to comply in their operations with the orders of the buying public."[1]


  1. Ludwig von Mises. XV. Market, 4. The Sovereignty of the Consumers, Human Action, online version, referenced 2011-02-05.