[gaterin]

Supporting industries losing economies of scale drives up costs. If you have fewer tailors, local cloth suppliers become insolvent. This leads to the few tailors having to import cloth and increase prices.

[stavros]

That makes sense, thanks. I guess the high end becomes slightly more expensive, while the low end becomes massively cheaper.

[jerf]

Closely related to Baumol's cost disease: https://en.wikipedia.org/wiki/Baumol%27s_cost_disease If one option becomes many multiples cheaper, anything that can't also get that cheap will almost inevitably rise in expense as a result.