Safe Auto Insurance Asserts "Minimum Coverage for Minimum Budgets" for Its

question 135

Multiple Choice

Safe Auto Insurance asserts "minimum coverage for minimum budgets" for its automobile insurance. Which of the following best describes Safe Auto's approach?

• A) Customers often use price as an indicator of quality, and Safe wants to be seen as a low quality provider.
• B) The type of advertising used by Safe makes insurance more tangible to the customer.
• C) Safe wants to reassure customers that it provides the highest level of service quality available.
• D) Because market conditions limit price rise on auto insurance, Safe uses this approach to gain customers.
• E) For certain services, customers look for the low-cost provider, which is what Safe claims to be.

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Definitions:

Marginal Benefit

The incremental enjoyment or advantage received from the consumption or creation of one more unit of a good or service.

Minimum Price

The lowest price at which a product or service can be sold, often regulated by governmental policies or agreements to ensure fair competition and to protect consumers or producers.

Producer Surplus

The difference between the amount that producers are willing and able to supply a good for and the actual amount they receive (the market price).

Actual Price

Refers to the real price at which a transaction takes place, considering any discounts or premiums, as opposed to a theoretical or listed price.