INSTRUCTIONS: Choose the Word or Phrase in [ ] Which

question 11

Multiple Choice

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.
-The Principle of [Indemnity | Peril] states that the insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss.

• A)for the first item
• B)for the second item
• C)if neither item will correctly complete the statement.

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Definitions:

Marginal Cost

The supplementary expense incurred from manufacturing one more unit of a good or service.

Price

The amount of money expected, required, or given in payment for something.

Price Rigidity

Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change.

Demand Curve

Depicts how the quantity demanded of a commodity varies with its price, commonly shown as a downward-sloping line on a graph, reflecting the inverse relationship between price and quantity demanded.