-Refer to Above Figure in Which Negative Externality Existed

Multiple Choice

-Refer to above figure in which negative externality existed. The government imposes a $1.00 pollution tax on the producer. Supply shifts leftward.

A) This tax will be shifted entirely to the consumer.
B) This tax will be borne entirely by the producer.
C) The amount of the tax shifted to the consumer depends on the consumer's reaction.
D) The tax will be divided into equal amounts between consumer and producer.