A tax that causes the price that producers receive for a commodity to deviate from the buyer's price is
A) an 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 natural market forces of supply and demand by artificially increasing the cost of production and reducing the quantity available for sale.

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