Which sentence describes equilibrium in supply and demand? A cell phone manufacturing company decided to use a price-skimming strategy to enter the market. It set the price of its phones at $450. However, a range of other pre mium smartphones was already available in the market, and thus the product did not achieve a good demand. Eventually, when the price of the phone fell to $300, demand for the product increased and profits began to soar. Now, market research suggests that if the company reduced its price to $275, the quantity demanded would also rise. The rise in demand was predicted to be 30 percent. However, a profit study revealed that to increase demand, it would have to compromise on profits. Thus, the company decided to leave the price at $275. This would help them gain enough customers to make a profit while also manufacturing enough phones to meet demand.