I don't think it's a misunderstanding of supply and demand. There can be an explanation on both sides of the equation. Increasing supply is a solution to increased demand, but it's worth sharing that demand itself has increased and why it's increased.

Take a look at chip shortage a few years ago. Demand went to about 5x normal demand in the space of a year. The solution was to increase supply but it's not a misunderstanding of supply and demand if you told me that demand increased for xyz reason.