homie

Industry’s demand curve is not shifted in this case. Only individual firm’s demand curve is.
As new firms enter the market, the industry supply curve will shift right, causing a decrease in price and increase in quantity. This is a movement along the industry demand curve, not a shift.
Now, the affected firm’s demand curve will not only shift left, but also become more elastic but consumers have more choices to select from. It will produce at the output where MR = MC and generate zero economic profit, and there will not be any new entrants.