revised sequence

revised sequence

the proposition that it is suppliers who actively determine what products are offered to consumers, rather than passively responding to the demands of buyers (see CONSUMER SOVEREIGNTY). This proposition was advanced by GALBRAITH, who suggested that large monopolistic and oligopolistic firms have the means and ability to influence consumers’ market behaviour through their NEW PRODUCT DEVELOPMENT and ADVERTISING policies.

To the extent that large suppliers are able to shape consumer choices and effectively ‘create’ the demand for products over time, they are able to make the PRICE SYSTEM producer-driven. This poses a challenge to the ‘conventional sequence’ whereby competitive firms merely serve the innate wants of consumers. See MONOPOLY, OLIGOPOLY.

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