The demand for oil is more inelastic in the short-run than the supply of oil, but it is not perfectly inelastic. Based only on this factor, if the government imposes a $ 5.00 per barrel tax on oil producers :()
A. The incidence of the tax will fall most heavily on oil producers, because the tax is imposed directly on them.
B. The incidence of the tax will be split between oil producers and oil consumers, with most of the tax being paid by oil producers.
C. The incidence of the tax will be split between oil producers and oil consumers, with most of the tax being paid by oil consumers.