I share your opinion. I also think readers prefer novels over shorties but not necessarily because of the price. In my case, I don't buy short stories because I always end with that -- it was too short -- felling.
Being a good or a bad shortie, I always end up with that feeling that I could had more. Those rare times I bought a short story, were because it was sold inside a book with a collection of short stories but, even so, I would rather have one of those shorties developed into a novel.
But, back to your question, the easiest and more interesting way to change a short into a novel is to use subplots.
The short story will have only the main plot line, most of the times, because of space. It's all a matter of having the unexploited parallel stories of your short appended to it.
If the short is about a police man that finds out a bomb in a post office and manage to disarm it, saving everybody inside, you could write a parallel plot about the recently fired mailman, who wrongly lost his job when he found out his boss was stealing money from the company, and decided to avenge himself by blowing everything up.
You could also write about the unrequited love the policeman had for the girl who work at the post office, and made him to go there a lot detecting something was not wrong... And even that the girl didn't returned the love because some mob guy blackmail her for some reason.
The main plot line is almost the same as the one in the shortie -- a police man that finds out a bomb in a post office and manage to disarm it, saving everybody inside -- but the subplots will change it into a novel and allow you to develop everything into a more complex web.