Demand patterns are determined by the market on the basis of
Answer Details
The market determines demand patterns based on the principle of "consumer sovereignty."
Consumer sovereignty means that consumers, as a group, have the power to determine which goods and services are produced by making their purchasing decisions in the marketplace.
In other words, the market responds to the choices that consumers make, and producers adjust their production to meet the demands of the consumers. This creates a market-driven economy where the preferences of consumers shape the production and distribution of goods and services.
Consumer sovereignty is driven by the consumers' rational behavior, where they aim to maximize their satisfaction by choosing the best combination of goods and services given their budget constraints. As consumers make choices, they reveal their "scale of preferences" – their willingness to pay for each good or service.
The price of the commodity is an important factor that affects demand patterns. As the price of a good or service increases, consumers tend to demand less of it, and vice versa. This is because consumers will try to adjust their consumption patterns to maximize their utility, given their budget constraints.
In summary, the market determines demand patterns based on consumer sovereignty, where consumers' choices and preferences shape the production and distribution of goods and services. The price of the commodity is an important factor that affects demand patterns as consumers adjust their consumption patterns to maximize their utility.