In economics, the point where a demand curve and supply curve intersect is called equilibrium.
At market equilibrium, the quantity buyers want to purchase equals the quantity sellers want to sell at the stated price. The associated price is the equilibrium price, and the associated amount is the equilibrium quantity. In a simple competitive model, neither a surplus nor a shortage exists at that point.
If the market price is above equilibrium, quantity supplied exceeds quantity demanded, creating a surplus. If it is below equilibrium, quantity demanded exceeds quantity supplied, creating a shortage. Competitive pressure can push prices toward the balancing point, although real markets may adjust slowly or face regulations and other frictions.
Equilibrium is a model result, not a claim that every real market is always perfectly balanced. Economists may also study multiple-market or general equilibrium, where prices and quantities across several markets are determined together. In introductory supply-and-demand analysis, however, the intersection is the central reference point.