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 S? to S?.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.
Correct Answer:
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