It's more than just that. You can see weird price changes like this because of the limits of substitution.
Imagine you've got a project to build a bookcase. You're using cheaper normal plywood for hidden structural parts and nicer but more expensive red plywood for the stuff people will see. You price the whole thing out.
Then the price of wood skyrockets. To keep the price of the whole project under control, you start cutting costs. You use more of the cheaper plywood for the whole project and decide to skimp on the red oak.
Scale that across many projects and you get a paradoxical result where the cheapest goods in a category go up in price while the better goods don't, because people are subbing out the "cheap" stuff for the good stuff.
Imagine you've got a project to build a bookcase. You're using cheaper normal plywood for hidden structural parts and nicer but more expensive red plywood for the stuff people will see. You price the whole thing out.
Then the price of wood skyrockets. To keep the price of the whole project under control, you start cutting costs. You use more of the cheaper plywood for the whole project and decide to skimp on the red oak.
Scale that across many projects and you get a paradoxical result where the cheapest goods in a category go up in price while the better goods don't, because people are subbing out the "cheap" stuff for the good stuff.
https://en.wikipedia.org/wiki/Giffen_good