Wetilook at how the dynamics of monopolstic compettion play cut in this model. Relerencing the last problem on the second midterm review will be heipful. Say that two symuretric grocery stores compete with one another. Wo solve frem the perspective of one store, and say that the same logic applles to the other. We describe the relafionship betasen marginalcosts and the number of customers sorvod (a) with the following equation: And for marginat revenue. The market demand curve is described by the folowing equation: Finaly, average costs are: mphen). If profts are pesitive, then an additional grocery store enters the market and shifs marynal revenue and maket demand for each stere down, by eo tor marginal revenue, so that wa have MR1=452q and by 15 for demand, so that we have q1D=120p. On the other hand, 1 prolts are negative, then one of eur two grocery atores exits and leaves the othar with a technologies dont change) Now the optimal number of customers to serve is - and profits are 1 (again, if negative, incluse the hyphen). What does this mean for entryiewk? Wetilook at how the dynamics of monopolstic compettion play cut in this model. Relerencing the last problem on the second midterm review will be heipful. Say that two symuretric grocery stores compete with one another. Wo solve frem the perspective of one store, and say that the same logic applles to the other. We describe the relafionship betasen marginalcosts and the number of customers sorvod (a) with the following equation: And for marginat revenue. The market demand curve is described by the folowing equation: Finaly, average costs are: mphen). If profts are pesitive, then an additional grocery store enters the market and shifs marynal revenue and maket demand for each stere down, by eo tor marginal revenue, so that wa have MR1=452q and by 15 for demand, so that we have q1D=120p. On the other hand, 1 prolts are negative, then one of eur two grocery atores exits and leaves the othar with a technologies dont change) Now the optimal number of customers to serve is - and profits are 1 (again, if negative, incluse the hyphen). What does this mean for entryiewk