1. If lots of people want something, the price goes up relative to what it would be if fewer people wanted said product (and vice-versa)
Higher production volume often results in lower price (as you mention in your next argument...)
2. If lots of people have and/or produce something, the price goes down relative to what it would be if fewer people supplied said product (and vice-versa).
Unless for instance the higher production volume creates a strain on neccessary resources.