Based on the Information in Jarred's Auto Insurance Application, His

question 3

Multiple Choice

Based on the information in Jarred's auto insurance application, his agent has assigned Jarred to driver class 2 and placed his 1-year-old car in model class R. The state where he lives requires minimum liability coverage of 50/100/50, and he also wants $250 deductible collision and full coverage comprehensive. Using Tables 19-6 and 19-7 from your text, find his total premium, if his state is in territory 4, and he has received a rating factor of 2. (Round your answer to the nearest cent)

• A) $250.00
• B) $306.00
• C) $397.00
• D) $794.00

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating its sensitivity to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.

Inelastic Demands

Describes a situation where the demand for a good or service is relatively unresponsive to changes in price, with a percentage change in quantity demanded that is less than the percentage change in price.

Elastic Demands

This refers to the sensitivity of the quantity demanded of a good to a change in its price, where a small price change leads to a larger change in quantity demanded.