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An Insurance Company Evaluates Many Numerical Variables About a Person

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Short Answer

An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance.A person's age is an example of a numerical variable.


Definitions:

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a good or service.

Downward-Sloping Demand

A common economic principle where the quantity demanded of a good or service decreases as its price increases.

Quantity Tax

A tax that is levied on the quantity of a good produced or sold, rather than its price.

Marginal Cost

The rise in overall expenses resulting from the production of an extra unit of a product or service.

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