NOTE 59 in relative prices are reflected in the relative profitability of different lines of production. Areas of higher profit attract more capital and tend to expand. On the contrary, low profits scale down the level of operation and discourage further investment. Rise in the average rate of profit would stimulate saving and investment and vice versa. Thus the preferences and priorities of consumers are signalled through the price mechanism and are reflected in the entire range of economic activities. In this sense, the consumer is the king, the maker of all economic decisions. His whims and fancies are the royal decrees; his writ runs through the price mechanism, and., every link in the chain of economic activities submits to his commands and carries out his dictates. This, in essence, is what is meant by consumer sovereignty. Economic theorists and textbook writers in the capitalist world have sedulously preserved the myth of consumer sovereignty as the cornerstone of their formulations and analytical structures. These theories were propped up by certain basic assumptions about market and consumer behaviour. Perfect competition, automacity of the market mechanism, homogeneity of the product, perfect knowledge and rationality on the part of the consumers were some of the pillars on which the entire range of economic theories was built. The reality, however, was different. It was increasingly becoming apparent that the market was by no means perfect. Buyers and sellers were not as innumerable as was made out to be. The bulk of production, distribution and exchange has been in the hands of monopolists and oligopolists. Sometimes a few buyers and speculators were in a dominant position to influence and manipulate the market to their advantage. Price Control The consumer knew very little about the conditions of the market or about the nature of the product he was buying. His ignorance and prejudice were exploited to the hilt by the producers and sellers through product differentiation, market manipulation, sales promotion as well as through sophisticated advertisements and marketing techniques. The myth of consumer sovereignty and automacity of the market mechanism was exploded by the Great Depression. In fact, the foundations as well as the superstructure of traditional economic theories were blown up by the agonizing appraisal of economic phenomena by Keynes, Chamberlin, Joan Robinson and their followers. Keynes devoted his attention to rescuing the capitalist economic system from the quagmire of depression, Others were concerned about the protection of the consumer from the ruthless exploitation of the monopolists, oligopolists and other manipulators of the market mechanism. Massive state intervention in the operations of the economic system became necessary to rescue the capitalist system from its collapse and for the protection of the helpless consumer. Pricing'implies a deliberate action on the part o f the decision-makers. Even during the hey-day of capitalism, the determination of a