The matrix product and its uses
The identity matrix and a geometric application
The identity matrix
The identity matrix I (of size n x n) is a square matrix that contains 1s on the main diagonal (from top-left to bottom-right) and 0s everywhere else. For the matrix product it plays the same role as the number 1 for ordinary multiplication: for any compatible matrix A, A x I = A and I x A = A.
Identity matrix of size 2 x 2:
[ 1 0 ]
I2 = [ 0 1 ]
Check with A = [[1,2],[3,4]]:
A x I2 = [ 1*1+2*0 1*0+2*1 ] = [ 1 2 ] = A
[ 3*1+4*0 3*0+4*1 ] [ 3 4 ]
(multiplying by the identity changes nothing in the matrix)
Application: transforming a point
A point of the plane with coordinates (x, y) can be represented by a column matrix. Applying a linear transformation (rotation, scaling) amounts to multiplying this column matrix by a transformation matrix M.
Scaling transformation M = [[2,0],[0,3]] applied to the point P = (1, 1):
[ 2 0 ] [ 1 ] [ 2*1 + 0*1 ] [ 2 ]
M x P = [ 0 3 ] x [ 1 ] = [ 0*1 + 3*1 ] = [ 3 ]
(the point (1,1) becomes the point (2,3): x is doubled, y is tripled)
You can also rotate a point by 90 degrees with the matrix R = [[0,-1],[1,0]]. Applied to the point (1, 0), you get R x (1,0) = (0, 1): the point has indeed turned a quarter of a turn.
Common pitfall
In a transformation M x P, the order matters: P must be a column matrix placed to the right of M so that the sizes are compatible (M is n x n, P is n x 1, the result is n x 1). Writing P x M would amount to attempting a product that is often impossible, or to a completely different result.

