@Rachel748
It is allways recommended to check what "smart prices" comes up with, it is easy to see in the calender or by simulating some bookings on the listing. I use Smart pricing with a very small bandwith, so never can be exceptional price-differences. If you cancel the booking it will harm your "status" as a host and you receive some penalties:
https://www.airbnb.com/help/article/990/i-m-a-host--what-penalties-apply-if-i-need-to-cancel-a-reser...
So you will have to decide wich option (keep or cancel) gives you the most "harm".
BTW Your guest can cancel with full refund within 48 hours after booking, as stated in the listing.
best regards,
Emiel