Which of the following conditions must hold in the equilibrium of a competitive market where the government puts a specific tax on consumers?
A) The quantity sold and the price paid by the buyer must lie on the demand curve.
B) The quantity sold and the seller's price must lie on the supply curve.
C) The quantity demanded must equal the quantity supplied.
D) the difference between the price the buyer pays and the price the seller receives must equal the specific tax.
E) all of the above
E
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Monopolistic competitors advertise because
A) they have downward sloping demand curves. B) the demand curves they face are very elastic. C) they produce goods that can be differentiated from the goods of other firms in the industry. D) they can earn long-run profits if they advertise.