The realistic middle ground: few sellers, differentiated products, and strategic pricing.
Warming up the engine…
Competition among the few or the slightly-different: each firm faces a downward-sloping demand for its own variety, prices above marginal cost, but free entry erodes profit to zero in the long run.
MR = MC with P > MC ; long run: demand tangent to ATC, profit = 0
Cafes, brands, and apps all sell close-but-not-identical products, so each has a little pricing power but not much. Entry keeps shaving away demand until price just covers average cost: firms end up with excess capacity and P above MC, the price of variety. Society trades a bit of efficiency for having choices.
The long-run diagram must show demand TANGENT to ATC at the chosen output, left of minimum ATC. That tangency (zero profit with market power) is the whole model in one picture.
Now prove you have it
Move the curve to where you think it lands, and get told exactly which part you got right.
Real-world scenarios on this model
Equilibrium at Q 22, P 40.
Equilibrium: Q* = 21.7, P* = 40.4
Current equations
Your café isn't a monopoly, but it's not wheat either. A differentiated product gives you a downward demand curve of your own, so you price like a mini-monopolist: MR = MC, price off demand.