We learned that when firms exit a monopolistically competitive industry remaining firms will see this as a shift outward in demand. Since there are fewer firms each remaining firm gains a larger share of the customer base (and probably decreasingly elastic demand as well as the number of substitutes falls).

   Graphically this is shown as in the graph to the right as a shift outward of both the demand and marginal revenue curves.

1. shift out in each individual firm's demand curve.
2. shift back in each individual firm's MC curve. In most cases entry and exit won't affect the costs of a firm. Like a case we considered in perfect competition it is possible that one of the industries which supplies our industry we're interested exhibits either increasing or decreasing returns to scale which could make this true. However, this is not a very likely case and should only be considered if you have evidence (in the question) to that effect.
3. shift up in each individual firm's AC curve. In most cases entry and exit won't affect the costs of a firm. Like a case we considered in perfect competition it is possible that one of the industries which supplies our industry we're interested exhibits either increasing or decreasing returns to scale which could make this true. However, this is not a very likely case and should only be considered if you have evidence (in the question) to that effect.
4. shift back in each individual firm's supply curve. There isn't anything we identify as a supply curve per se in Monopolistic Competition. Supply curves indicate that the firm has no control over market price but because monopolistic competitors face downward sloping demand curves, supply curves don't exist in this structure.
5. shift back in each individual firm's MR curve. In this case the MR curve shifts out, not back, just like the demand curve