Hi,
The host is wrong. Once the reservation is confirmed, the price can not be changed. Unless the booking is not correct, like extra guests, other dates, extensions, etc. It's the responsibility of the host to do the correct pricing BEFORE bookings are made.
You could even report this host at Airbnb being somebody violating the rules.
Do not cancel the reservation yourself, it's up to the host to do this. If you want to cancel because you feel uncomfortable with this host and to her/his practices, contact Airbnb, explain the situation and let Airbnb do the job.
Best regards,Emiel