[This is part of the series: The Complete Guide To Economics 101.]
What is customer sovereignty?
Customer Sovereignty is the simple idea that the customer decides.
For example, in capitalism, individual factories and firms get to decide what to produce and how much to produce.
While that is correct, businesses to not make this decision in a vacuum.
What the customer wants, and is willing to pay for, is what companies produce and sell.
And in this, they are guided by the signal of profit and loss.