"I understand the concept of supply and demand, I'm just having trouble understanding why there would be a higher demand for an MS-67 than a PF-70 of the same coin."

Jim... Because they are not the same coin. One is Mint State (MS) the other is Proof (PR).

The U.S. Government issues both Proof Sets and Uncirculated Sets at different prices. Most collectors collect uncirculated grades ... while other collectors may specialize in proof coins.

Proof is not a grade. Proof is a method of manufacture. Proof coins are struck two or more times on specially prepared planchets with highly polished dies.