This is the ultimate equilibrium between the consumer and the producer in economics. It's exactly what every producer strives for.

Producers wish to charge the highest price possible. They are willing to make a certain amount of an item, let's say pencils, and charge a certain price. Depending on the price they charge for the pencils, the lower the price, the higher the demand, thanks to the economic law of supply and demand.

When the supply of pencils exactly meets the demand of the consumer, then the market clearing price is acheived and everyone is happy.

Example: At 15 cents, consumers will buy 3,000 pencils, however this is less than the producer is willing to sell the pencils for. At 35 cents, consumers will buy 1,000 pencils which is less than the producer wishes to sell. However, at 25 cents the consumer will purchase 2,000 pencils which is as much as the producer is willing to make and at a price the producer will sell. The market clearing price has been met.