If profits are positive, the entry of new firms causes the short-run market supply curve to shift outward because more firms are now producing than were in the market previously. Such a shift causes market price (and market profits) to fall. The process continues until no firm contemplating entering the market would be able to earn an economic profit. 3 At that point, entry by new firms ceases and number of firms has reached an equilibrium. When the firms in a curve to shift to the left. Market price then rises, eliminating loses for those firms remaining in the marketplace.