The surplus of a product leads for the price to go down because there is competition on a particular product. Whoever, has the lowest prices will sell the most product. When the availability of that product diminishes, the prices will go up because there is a higher demand for that product.
No, economics 101. The opposite is actually true. The surplus of a particular product on the market and the ability for the consumer to access these products usually lead to a price decline on that particular product. For example, in agriculture there are seasonal crops that sometimes yield surplus, when this happens farmers usually compete among each other strive to increase revenue by lowering the price of the crop to the consumer.
If a commodity is widely available, prices will drop, as people will be able to obtain it almost anywhere. It's when supplies diminish that we see prices rise, as people compete for the limited resources, and are willing to pay higher and higher prices to obtain the item. In addition, items that are rare become status symbols, and become more highly sought after.
No, an increase in supply does not lead to higher prices. It leads to lower prices. It is a matter of applying simple economics. Something in great supply means it must be sold or storage costs will begin to lower the value of goods. If people are willingly paying a price for an item, making more if it will not make people want to spend more.