This is assuming that every consumers knows what evil goes into their consumption. They don't, and not by choice, but because nobody will tell them. Ever. In fact, everyone will spend billions to make sure they don't know.

The problem with simplistic free market dynamics views is that they rely on consumer choice. Consumer choice relies on consumer consent and free information flow.

As soon as EITHER of those two are chilled, even just a tiny bit, the free market dynamics thinking falls down like a house of cards. Now the situation is orders of magnitude more complex, and we actually have to think about what's going on, inatead of appealing to a model so bare-bones it's practically impossible to see in real life.