It's really pretty basic.
Vendor decides to buy blueray players over HD Dvd players. Buys 10,000 of them for $100 each. He sells them for $175 each.
HD Dvd goes away and Blueray is in high demand. He still has 7000 blueray players.
Due to the higher demand he sells the blueray players for $275 each.
People continue to buy them at a faster base than when he was selling at $175.
He ups his price to $325 and sales drop back to the pace when he sold them for $175.
He determines this is what the market will bear and he sells his last 5000 blueray players or $325 each even though he bought them for $100 and at one time sold them for $175.
Prices always go up with more demand, even if there is still good supply. If the supply shrinks while demand increases, the prices go WAY up. If supply shrinks and demand stays the same, prices go up. If demand shrinks and supply stays the same, prices go down.
"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." — Frédéric Bastiat