A tax that causes the price that producers receive for a commodity to deviate from the buyer's price is
A)a unit tax.
B)a compensated tax.
C)an income tax.
D)a price-distorting tax.

Question

Quizplus · Accepted Answer

A tax that causes the price that producers receive for a commodity to deviate from the buyer's price is known as a price-distorting tax. This is because it distorts the market price and affects the supply and demand of the commodity, leading to a change in the price paid by buyers and sellers. A unit tax, compensated tax, and income tax may not necessarily cause price distortions.

A Tax That Causes the Price That Producers Receive for a Commodity