Luigi's Pizzeria Has Insured Its Building with Multiple Companies for a Total

question 21

Short Answer

Luigi's Pizzeria has insured its building with multiple companies for a total of $342,000, of which $132,400 is with Rockford's. Assuming that all coinsurance requirements have been met, how much would Rockford's be responsible for in the event of a $152,000 fire?

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Definitions:

Monopoly

A market structure characterized by a single seller, selling a unique product in the market without any close substitutes.

Price Taker

A market participant that accepts market prices as given and has no influence to alter the price of the good or service.

Buyer

A person or organization that purchases goods or services.

Law Of Demand

The economic principle stating that, all else being equal, as the price of a good or service decreases, consumer demand for it will increase, and vice versa.