[mushufasa]

Another way to think of this intuitively is simple economies of scale. Or volume discounts if you work in sales.

When you buy 10,000 handbags you pay the wholesale price whereas buying a single handbag can be quite expensive.

If there is way lower hose demand (volume of sales), the horse producers will have to charge a higher price per horse.

Thus, society in aggregate spends way less on horses while the price of a horse goes up.

[BobaFloutist]

Which interacts strangely with supply and demand and production costs, in a way that makes it often difficult to predict the final unit cost until you actually go out and try to buy something.

Chopped vegetables take slightly more labor to prepare and are worth slightly more to most people, because they're easier to use, despite usually having slightly worse flavor, so they're usually sold at a slight premium. I don't know, but if I had to guess, I'd assume they're a more popular product.

Unflavored whey protein is strictly cheaper to produce than flavored, but it's a less popular product, and usually the people looking to buy it are slightly more informed and higher income, so it's priced at a premium.

Neither of these violates the laws of supply and demand or volume discounts or anything, but you could reasonably predict any result for either of them and be wrong.

[mushufasa]

The key concept here is that the demand is mostly exogenous changes; people demand fewer horses because horses are no longer as good of a product. The whole supply/demand curve for horses shifts.