What we've found is that there's a huge difference between opinion polls on consumers' desire for green stuff, and their actions. Everyone says, for example, that they'd be willing to pay X% extra to buy a similar product that is environmentally responsible - but in reality that number is actually very, very close to 0%.
This is very frustrating to me - consumers talk a lot of shit about companies needing to be environmentally responsible, but from the metrics I've seen first-hand, even making them pay a single penny extra for it is too much.
I never expected X = 0.
lim($price -> 0) [ c * $price ] = X
(Consider values less than $0.01 to be legal)
You're essentially right, but not quite.
P.S. make sure if you make your product more 'green' people are aware of this. If it's not clear, people may not understand why the price is higher, and when presented with two goods you believe are completely equal you will naturally choose the cheaper one.