CPA-BUSINESS practice question 17 of 35

If a group of consumers decide to boycott a particular product, the expected result would be:

Full set: 530 questions

Answer options

A: An increase in the product price to make up lost revenue.

B: A decrease in the demand for the product. Correct answer

C: An increase in product supply because of increased availability.

D: That companies in the industry would experience higher economic profits.

Correct Answer:

B. A decrease in the demand for the product.

Explanation

Choice "b" is correct. A consumer boycott will decrease demand for the product being boycotted. Choice "a" is incorrect. Increasing price will further reduce the quantity demanded. The effect on revenue is uncertain. Choice "c" is incorrect. Supply will be unaffected by a boycott. Choice "d" is incorrect. A boycott of a particular product will reduce the overall profits of the industry.

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