The equilibrium point is the point at which the supply and demand curves inter- sect. The corresponding equilibrium price is the only price at which the quantity sup- plied is equal to the quantity demanded. Therefore, it is reasonable to expect that this will be the price prevailing in the market. We make the assumption that this is indeed the case. Later in the book, we will discover that there are many circum- stances in which this assumption is well warranted. Because the point of equilibrium is determined by the supply and demand curves, it can change only if either the supply or the demand curve changes. To see how a change in circumstances affects market prices and quantities, we first decide how it affects the supply and demand curves and then see where the equilibrium point has moved. an astay