Which term refers to the idea that firms should implement social commitments and consider the impact of their actions on society?

• A. Consumer Sovereignty
• B. Market Equilibrium
• C. Profit Maximization
• D. Corporate Social Responsibility

Answer: (D)

Verified step by step guidance

1. Understand the concept being asked: the term refers to firms taking into account their social commitments and the broader impact of their actions on society.
2. Review the given options and their meanings: Consumer Sovereignty relates to consumer preferences driving the market; Market Equilibrium is about supply and demand balance; Profit Maximization focuses on firms maximizing their earnings.
3. Identify the term that specifically involves ethical considerations and social impact beyond just profits or market forces.
4. Recognize that Corporate Social Responsibility (CSR) is the concept where firms voluntarily integrate social and environmental concerns in their business operations and interactions with stakeholders.
5. Conclude that the correct term describing firms' social commitments and societal impact is Corporate Social Responsibility.