what generally happens is that the market adjusts. using automobiles as an example, if people aren't buying then the dealers provide incentive, usually by lowering their markup. they make less profit per car, but at least they sell them. in turn, they will save money other ways....less people buying means less salesmen needed, and more emphasis placed on sustaining the automobiles on the road by running specials on authentic manufacturer auto parts in their service departments. when people are spending less, the market will adjust on its own to accommodate consumers.
good examples of how things get screwed up can also be found in the auto industry. in the early-mid 70's, japanese imports were like tiny little tin cans compared to american autos. no one payed them much attention until we had our fuel crisis with it's long lines at the gas pump and rationing based on license plate numbers. consumers began to buy more japanese cars, and as they did, the japanese began making them better - more solid, safer, and with increased fuel economy. they drove up the demand for them in the american market. the american auto industry reacted by lobbying lawmakers into placing a tarrif on all imports, which artificially inflated the cost of the japanese cars to the point where people were more likely to 'buy american' due to a relatively equal cost between the japanese cars and the american ones. instead of US automakers rising to the challenge of producing a superior product, they instead had washington intervene, essentially taking the benefit of competition out of the equation. that's one of the reasons there are so many japanese automakers with plants here in the US now. it's more cost effective for them to pay a higher wage to have them built here.