The higher grade the card is, the more valuable it becomes. If a card books for $25, and its graded 10, it can sell for 3 times that amount or more. Also the grading company plays a huge difference too. (Beckett is probably the best out there)
The way the grading system works is like this....Lets say you have a Albert Pujols bowman chrome rookie auto and you mail it out to get graded. The grading company keeps track of EVERY same card that ever got graded in their database. Lets say out of 1000 people that got that same exact card graded, only 12 of them were 10's, 100 were 9.5, 400 were 9.0, and so on...What your paying for is the scarcity of the condition of the card.