Final answer:
The equilibrium point is where the demand and supply curves intersect, establishing the market price where quantity demanded equals quantity supplied.
Step-by-step explanation:
When demand and supply curves intersect, the equilibrium price and quantity are established. This equilibrium point is where the quantity demanded equals the quantity supplied. If the market price is set below this equilibrium point, the demand will exceed supply, leading to a shortage. Conversely, if the price is above the equilibrium, supply will exceed demand, causing a surplus. Both situations will invoke economic forces that drive the market price toward the equilibrium price where the market clears.