The forces of demand and supply determine market prices through the concept of equilibrium. Market equilibrium is achieved when the quantity demanded of a commodity equals the quantity supplied, resulting in an equilibrium price where the market demand curve intersects the supply curve. At this equilibrium price, the amount consumers want to buy matches exactly what producers are willing to sell, ensuring no surplus or shortage. Excess demand, where demand exceeds supply, drives prices up, while excess supply, where supply exceeds demand, pushes prices down, both leading towards the equilibrium price. This balance ensures that, in the absence of external forces, market prices remain stable at the equilibrium point.