(As propounded by Okoli Chukwujekwu)
An Economic theory that describes and explains how the price of commodities and services after been made superfluously high by the expenses of extractive, productive and distributive efforts, will eventually come to be cheaper or rebound after the afore mentioned commodities and services remain on the ‘shelf ‘ for too long without purchase from either of the three classes in the economic system (first class,middle class and lower class). This is a theory of resistance of economic tyranny and the balance that comes with the victory.
Recessions have always been a part of every economy. No matter how negative it might be in it’s pronunciation and manifestation, it is regarded as the beating heart of any economy. An economy can measure it’s strength and ascertain areas of impediments when it slides back retrogressively through recession.
When recession occurs to an economy, there seems to be a widely recognized manifestation of price increase of products and services and this can make or force consumers to spend less as a result of their financial incapability to afford most preferable goods and services.
For instance, if a businessman who imports clothes into Nigeria and places them on sale to the general public should as a result of all expenses he encountered while bringing these goods into Nigeria , increase the cost price of his goods, it is certain that the average Nigerian will not be able to afford the items.
Also, an average entrepreneur who purchases garri directly from an industry who mills cassava to make garri will be forced to pay the cost price it took to mill the cassava. The industry may be forced to add up expenses from machine maintenance, fuel price (which may have Skyrocked as a result of recession ), payment of wages of machine operators, etc the resulting sum may be injected into the original price of garri and this could make that price rise overwhelmingly.
The entrepreneur having no choice but to buy the product (especially when garri selling is a vital means of survival) will as a means to recover overwhelming expenses made in purchasing garri , will also in turn inflate their selling price to retailers who will eventually in turn do the same to the final consumers.
As this continuous cycle of self mitigated price rise continues, a streak of frustration and desperation will be created in the efforts of the consumers to meet up with prices of goods and services that elevate every day that goes by. The result of this is that consumers will be forced to withdraw or abstain from purchasing certain goods and same action will be taken towards patronizing certain services.
In a case of this nature, consumers become inventive and industrious as a result of necessity to survive. They easily make do with what they have and instead of buying new products or patronizing certain services, they tend to create a replica of the expensive good using local or home made materials or resources. For instance, the use of more honey in the place of sugar will lead to a relatively high demand on honey and a low demand on sugar , the demand for pencil jeans which might be expensive will push a teenager to take his baggy jeans to a tailor to re-shape and mend it, the popular demand for clothes with certain colours (such as black) ,if found to be expensive will make consumers apply black cloth die to change the original color of their clothes to black, which in itself is a cheaper alternative than purchasing expensive black clothes in the market.
If this economic trend continues for over a long period of time, the eventual result is that goods or services that remain unpurchased and non patronized will with it’s expiry or warranty date become valueless and fail to satisfy consumers. The entrepreneur may have no choice but to dispose off these goods or services causing a colossal financial loss on his part. If such event should occur again over long periods, the entrepreneur to avoid further loss may deflate the price of his commodity or service, causing the price of the commodity (good) or service to Re-Bound to it’s original cost price affordable to consumers.
When this happens, the goods and services are sold off for the original cost price , it means the price of these goods and commodities were not inflated by the entrepreneur on consideration of all calculated expenses made during their purchase.
The Re-Bound Theory was not created to reveal loses of manufacturers, producers, wholesalers and Retailers, but instead, it seeks to identify with consumers refusal to bend to economic constraints, hoarders and intentional price inflation agents and gives an expose on consumers propensity to adapt using available resources. This theory reveals consumers to be the life force of any market.