What are you not understanding?

The marketcap is equal to the price per coin X the number of coins in existence. If there are only 10 lollipops in the world and each of them is worth $10, the total marketcap of those lollipops is $100;

As in writing this, there are 16,566,050 BTC in existence. Each BTC is worth $3248; The market cap of Bitcoin is $53,813,653,802 (16,566,050 x $3248); If the price of the bitcoin doubles right now, the total marketcap will double aswell. It's basic math.

A low supply is better because if there is more demand and less supply, there are more people buying Bitcoin and less people selling. This means that people will pay more for each coin, since its amount is limited = higher price.