Figure 4-9 -Refer to Figure 4-9.Suppose the Market Is Initially in Equilibrium

Multiple Choice

Figure 4-9

-Refer to Figure 4-9.Suppose the market is initially in equilibrium at price P₁ and now the government imposes a tax on every unit sold.Which of the following statements best describes the impact of the tax? For demand curve D₁

A) the producer bears a greater share of the tax burden if the supply curve is S₂.
B) the producer bears a greater share of the tax burden if the supply curve is S₁.
C) the producer's share of the tax burden is the same whether the supply curve is S₁ or S₂.
D) the producer bears the entire burden of the tax if the supply curve is S₁ and the consumer bears the entire burden of the tax if the supply curve is S₂.