In a monopolistically competitive market, a successful new restaurant
A) can earn economic profits in the long run if it uses barriers to restrict entry by new restaurants.
B) must obtain a trademark to ensure that it will break even in the long run.
C) will face high entry barriers because of health and safety regulations to which all restaurants are subject.
D) will earn zero economic profit in the long run because of free entry, but competition will lead restaurants to offer different versions of the same product.
Question 2
The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the
A) vertical-equity principle. B) benefits-received principle.
C) horizontal-equity principle. D) ability-to-pay principle.
