Prior to any taxes, the equilibrium price of gasoline is $3 per gallon.Then a $1 tax is levied on each gallon of gas.As a result, the price of gasoline rises to $3.75 per gallon.The incidence of the $1 tax is:
A.$0.25 paid by consumers, $0.75 paid by producers.
B.$0.50 paid by consumers, $0.50 paid by producers.
C.$1.00 paid by producers, $0 paid by consumers.
D.$0.75 paid by consumers, $0.25 paid by producers.

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The Answer of Prior to any taxes, the equilibrium price of gasoline is $3 per gallon.Then a $1 tax is levied on each gallon of gas.As a result, the price of gasoline rises to $3.75 per gallon.The incidence of the $1 tax is:
A.$0.25 paid by consumers, $0.75 paid by producers.
B.$0.50 paid by consumers, $0.50 paid by producers.
C.$1.00 paid by producers, $0 paid by consumers.
D.$0.75 paid by consumers, $0.25 paid by producers.

Prior to Any Taxes, the Equilibrium Price of Gasoline Is