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The graph above shows the effect of a $3 tax on a pound of mushrooms. Before the tax, 1,000 pounds of mushrooms are sold at
The graph above shows the effect of a $3 tax on a pound of mushrooms. Before the tax, 1,000 pounds of mushrooms are sold at an equilibrium price of $7 per pound. After the tax, 700 pounds are sold at $8 per pound. Which of the following correctly states the incidence of the tax on mushrooms (per pound)? Choose one: A. $2 for sellers and $1 for buyers B. The entire $3 tax falls on buyers. C. The entire $3 tax falls on sellers. D. $2 for buyers and $1 for sellers
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