First model of Chamberlin:

We assume that each firm is in short-run equilibrium maximising its profit.  

dd´: firm's demand curve

E: equilibrium point given by MR= MC.

P_M: price corresponding to MR=MC.

X_M: output corresponding to MR = MC

Area P_M ACB: total profit

Since there are no entry barriers, new firms will enter and the demand curve of the individual firm will shift down from dd´. However, the cost curves  would not change due to new entrants. For each entry, there will be a corresponding shift in demand and for each shift, there will be a price adjustment. This process will continue till there is supernormal profit. The supernormal profits will be wiped out when the demand curve of the firms is tangent to the average cost curve. Consequently, the profits earned will be normal and there will be no further entries.