Consumers are individuals who acquire goods or services for direct use or ownership, rather than for resale or use in production or manufacturing. This group is a critical element in an economy.
The needs and wants of consumers drive economic activity and direct the production and distribution of goods and services. Without them producers lack a key motivation to produce.
Consumers are said to be sovereign because they decide what bundles of goods and services they wish to purchase. However they value this consumption also in terms of quality and safety.
Many consumers are now shifting to becoming ‘prosumers’ – consumers that are also producers or influence the products and services being created by being directly involved in their production. This is especially the case for services delivered via the Internet – including information and media on the social web.
So are we seeing a new paradigm with ‘prosumers’ or just a blurring of boundaries as the same economic participants take on multiple roles in the economy?
This Micro Brief is part of an ongoing series provided by Lytton Advisory as a general public information service. These concepts underpin modern economic analysis. Find out more about smarter capital investment decisions using economics at www.lyttonadvisory.com.au.