Figure: Industry Firms P P MC S2 $15 X ATC ... MR = P Q Q The market is characterized by demand curve D2 and supply curve S1. The firms in the industry are earning which will cause the O losses; supply curve to shift to $2 and the demand curve to shift to D1 O profits; supply curve to shift to $2 O profits; supply curve to shift to $2 and the demand curve to shift to D1 O losses; demand curve to shift to D1