Answer: As prices fall, demand goes up.
The price of the good needs to be increased.
Step-by-step explanation:
According to the law of demand, the quantity demand for a good is inversely related to its own price. So, when price falls quantity demanded for the good must go up and when price rises quantity demanded for the good must fall.
When price P2 is lower than the equilibrium price there is disequilibrium in the economy. At P2, demand for the good is greater than its supply. So, in order to achieve equilibrium price of the good needs to be increase till demand for the good is equal to its supply.