An equilibrium is defined as a situation where the plans of all consumers and firms in the market match and the market clears. When the supply and demand curves intersect, the market is in equilibrium. This is where the quantity demanded and quantity supplied are equal. The corresponding price is the equilibrium price or market-clearing price, the quantity is the equilibrium quantity.

Suppose D₁ and S₁ are the initial market demand curve and the initial market supply curve, respectively. The initial equilibrium is established at point E₁, where the market demand curve and the market supply curve intersects each other. Accordingly, the equilibrium price is OP₁ and the equilibrium quantity demanded is Oq₁.
Now, if there is an increase in the market demand, the market demand curve shifts parallelly rightwards to D₂ from D₁, while the market supply curve remains unchanged at S₁. This implies that at the initial price OP₁, there exist excess demand equivalent to (Oq'₁ - Oq₁) units. This excess demand will increase competition among the buyers and they will now be ready to pay a higher price to acquire more units of the good. This will further raise the market price. The price will continue to rise till it reaches OP₂. The new equilibrium is established at point E₂, where the new demand curve D₂ intersects the supply curve S₁
Hence, an increase in demand with supply remaining constant, results in rise in the equilibrium price as well as the equilibrium quantity.