The statutory incidence of the tax falls on producers, as they are required to pay the $2 per bushel tax.
To determine the economic incidence:
- Demand is inelastic (slope is -100)
- Supply is elastic (slope is 200)
According to the rules of tax incidence, the party with inelastic supply or demand bears the burden of the tax. Therefore, the economic incidence falls mostly on consumers, as they have inelastic demand for apples. Producers are able to shift some of the tax burden to consumers by slightly reducing the quantity supplied and raising prices.