Demand shifts from D to D'. Prices are sticky in the short-run (this is a Keynesian assumption), and so the equilibrium price of p1 remains and at the new demand curve D' the quantity q2 will be demanded. However, this demand outstrips the quantity firms are willing to supply at p1 (which is q1). (I made a mistake in the diagram, the actual XS supply is between q1 and q2).
Therefore, what will happen is the market will ration the excess demand and prices will adjust to the new equilibrium price at P*2 (P-two-star), and the demand is rationed to new equilibrium quantity demanded q*2 (q-two-star) at this new price. This new equilibrium is one of which buyers are happy to pay the new price and suppliers are happy to supply at this price.