The laws of supply and demand only work that way if supply is limited, which is very often not the case. A lot of production benefits from economies of scale, w

The laws of supply and demand only work that way if supply is limited, which is very often not the case. A lot of production benefits from economies of scale, where fixed overheads are dwarfed by unit costs. In such cases, decreased demand results in reduced production, which results in the loss of economies of scale as production overheads remain the same or similar, thereby increasing in magnitude relative to unit costs. Maybe it costs ten gajillion dollars to produce one litre of petrol, but twenty gajillion dollars to produce one bazillion litres of petrol.