We perform our last full economic analysis: firms experience a decrease in the costs of production. Their cost curves shift downward (and to the right), and cause the supply curve to increase. In the short run they enjoy economic profits, and in the long run additional firms enter the market, driving the price down to the new efficient scale at the new long run equilibrium where profits are again equal to zero. NOTE: error in narrative at 7:08. Q3 is HIGHER, not LOWER than Q2.