Discuss the Concept of Insurable Interest

question 17

Essay

Discuss the concept of insurable interest.Indicate the difference between a buyer's and a seller's insurable interest.

---

Definitions:

Short-run Total Cost

The total of all costs, both fixed and variable, that a firm incurs in producing goods or services in the short run.

Average Total Cost

The cost per unit of output, determined by dividing the overall production cost by the quantity produced.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.

Variable Cost

A cost that changes with the level of output or production.