Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 20 million bottles of wine were sold every month at a price of $7 per bottle. After the tax, 13 million bottles of wine are sold every month; consumers pay $10 per bottle (including the tax), and producers receive $5 per bottle.

The amount of the tax on a bottle of wine isper bottle. Of this amount, the burden that falls on consumers isper bottle, and the burden that falls on producers isper bottle.

True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers.

True?

False?