Demand curve for the the Firm and the Industry

Individual Firm will increase its output as a responses for rising demand, although can cause prices down together the situation will become worse.
Profit maximizing Level of Output
The goal of the firm is to maximize profit. Profit is difference between Revenue total and cost total.
What will be happened with profit as a response in the change of output is determined by Marginal Revenue (MR) and Marginal Cost (MC)

A firm maximizes profit when MC=MR 

• Marginal Revenue (MR) is changes revenue total related to changes in quantity. 

• Marginal Cost (MC) is changes cost total related to changes in quantity.

• Actors in Perfectly Competitive Market receive the market price (P) as a given 

• So, Marginal revenue as same as with price (MR=P)

• In the beginning marginal cost dropped and then started to rise.
• To maximize profit a firm must produces when marginal cost as same as marginal revenue  (MC=MR)