-The Above Figure Shows the Market for Gourmet Ice Cream

question 88

Multiple Choice

-The above figure shows the market for gourmet ice cream.In effort to reduce obesity,government places a $2 tax per gallon on suppliers in this market,shifting the supply curve from S0 to S1.The tax incidence is

• A)split equally between consumers and producers,each paying $1 per gallon.
• B)split equally between consumers and producers,each paying $2 per gallon.
• C)such that consumers pay $2 per gallon and producers pay $1 per gallon.
• D)such that consumers pay $1 per gallon and producers pay $2 per gallon.
• E)such that producers pay all of the tax.

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