7 Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations:

Demand: O = 100/N - P Marginal revenue: MR = 100/N - 20 Total cost: TC = 50 + 02 Marginal cost: MC = 20 a How does N, the number of firms in the market, affect each firm's demand curve? Why?

b How many units does each firm produce? (The answers to this and the next two questions depend on N.)

c What price does each firm charge?

d How much profit does each firm make?

e In the long run, how many firms will exist in this market?