<p>This is actually an interesting question that I've never really thought of. What you are essentially describing is a monopoly on the side of the consumers to artificially drive down quantity demanded in order to lower prices.</p>

<p>You didn't state many details in your question but I'm assuming that the good in question is inelastic, is subject to competitive pricing, and has it's current price in competitive equilibrium.</p>

<p>The outcome of consumers collectively refusing to buy a product above a certain price would have the same effect of monopolistic pricing of a firm but in reverse, there would be a shift of some producer surplus into consumer surplus as well as the creation of dead weight loss as some producers are priced out of the market creating shortages. </p>

<p>This could also be empirically the same as the creation of a price ceiling for the good. If collectively consumers refused to buy a product above a certain price then that product would have a price ceiling and producers would produce at that price in accordance with their own supply curve. </p>

<p>As for your question about whether it would be a "good idea" that depends on what your definition of a positive outcome is. This type of action would have the effect of transferring some of the producer surplus to the consumers which would benefit the consumers but it would simultaneously lead to less production on the part of the producers due to the lower price creating dead weight loss and shortages. Empirically this would be bad for the aggregate economy as a whole due to the loss of surplus to dead weight loss, however, depending on the producer supply curve this may or may not lead to an aggregate gain in consumer surplus. An inelastic supply curve would lead to a gain in aggregate consumer surplus while a elastic supply curve would lead to a loss. </p>

CC BY-SA 3.0
2017-05-05T15:45:07.727Z
2017-05-05T15:45:07.727Z
TheSaint321
<ul>
<li>Depends what you mean by "good idea." Who is trying to maximize what?</li>
<li>Why is the price at "unreasonable" levels? Maybe you simply mean, "there is a group of consumers who would purchase" this good if its price is 10% lower but would not at the current price.</li>
</ul>

<p>Jumping off the second point, through the lens of simple supply and demand, a boycott of a group of consumers who are not purchasing the good would not shift demand for the good in.  They are already not buying it.  </p>

<p>Maybe you mean the boycott would be bad publicity for the producer of $x$, which leads to a demand shock in, and a lower price.  In the short run this might work, but if the price were already at market level before the boycott, it would return there in the long run. </p>

<p>Then, back to point 1.  Is it a "good idea" to run a smear campaign to get a temporarily lower price for $x$.? Depends on the opportunity cost of smearing for the smearers.</p>

CC BY-SA 3.0
2017-05-05T15:32:26.957Z
2017-05-05T15:32:26.957Z
Russell Bittmann
<p>I've been thinking about this situation lately:</p>

<p>A normal good $x$'s price has become unreasonably high. Would it be a good idea for consumers to boycott (i.e. stop buying) $x$ in order to drive down its price, then continue purchasing at the lower price? Why or why not?</p>

<consumer-theory>
Driving down the price of a good
Bing
# Driving down the price of a good

(Asked by: username_0 on 2017-05-05)

I've been thinking about this situation lately:

A normal good $x$'s price has become unreasonably high. Would it be a good idea for consumers to boycott (i.e. stop buying) $x$ in order to drive down its price, then continue purchasing at the lower price? Why or why not?

**Tags:** consumer-theory


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## 2 answers

### Answer by username_1 on 2017-05-05. Score: 1

This is actually an interesting question that I've never really thought of. What you are essentially describing is a monopoly on the side of the consumers to artificially drive down quantity demanded in order to lower prices.

You didn't state many details in your question but I'm assuming that the good in question is inelastic, is subject to competitive pricing, and has it's current price in competitive equilibrium.

The outcome of consumers collectively refusing to buy a product above a certain price would have the same effect of monopolistic pricing of a firm but in reverse, there would be a shift of some producer surplus into consumer surplus as well as the creation of dead weight loss as some producers are priced out of the market creating shortages.

This could also be empirically the same as the creation of a price ceiling for the good. If collectively consumers refused to buy a product above a certain price then that product would have a price ceiling and producers would produce at that price in accordance with their own supply curve.

As for your question about whether it would be a "good idea" that depends on what your definition of a positive outcome is. This type of action would have the effect of transferring some of the producer surplus to the consumers which would benefit the consumers but it would simultaneously lead to less production on the part of the producers due to the lower price creating dead weight loss and shortages. Empirically this would be bad for the aggregate economy as a whole due to the loss of surplus to dead weight loss, however, depending on the producer supply curve this may or may not lead to an aggregate gain in consumer surplus. An inelastic supply curve would lead to a gain in aggregate consumer surplus while a elastic supply curve would lead to a loss.


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### Answer by username_2 on 2017-05-05. Score: 0

* Depends what you mean by "good idea." Who is trying to maximize what?
* Why is the price at "unreasonable" levels? Maybe you simply mean, "there is a group of consumers who would purchase" this good if its price is 10% lower but would not at the current price.

Jumping off the second point, through the lens of simple supply and demand, a boycott of a group of consumers who are not purchasing the good would not shift demand for the good in. They are already not buying it.

Maybe you mean the boycott would be bad publicity for the producer of $x$, which leads to a demand shock in, and a lower price. In the short run this might work, but if the price were already at market level before the boycott, it would return there in the long run.

Then, back to point 1. Is it a "good idea" to run a smear campaign to get a temporarily lower price for $x$.? Depends on the opportunity cost of smearing for the smearers.


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