Answer: Low demand, increased supply
Explanation: High prices in a market economy leads to a host of effects. It impacts the cost of living, the cost of doing business, borrowing money, and every other facet of the economy including demand and supply.
Higher prices leads to low demand for goods and services, because as the price of goods increases, so does the opportunity cost of buying those goods. As a result, people will naturally avoid buying since it will force them to forgo the consumption of some other goods they value more. For suppliers, it's an avenue to produce more since there would be higher gains at such prices. The laws of supply and demand interact together to determine the volume of goods and services traded and their actual prices.
