In the Following Figure,the First Panel Shows a Market Situation

question 66

Multiple Choice

In the following figure,the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation. Figure 12.2 In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-According to Figure 12.2,the total clean up cost for the society prior to regulation is:

• A)area 0BEQ₁.
• B)area 0FIQ₂.
• C)area 0FGQ₁.
• D)area 0P₁EQ₁.
• E)area 0CEQ₁.

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Definitions:

Claim

A demand for something as due, particularly money, property, or legal relief, often the subject of legal action.

Insurer Duty

The obligations that an insurance company has toward its policyholders, including the duty to act in good faith and to pay valid claims.

Incontestability Clause

A clause in a policy for life or health insurance stating that after the policy has been in force for a specified length of time (usually two or three years), the insurer cannot contest statements made in the policyholder’s application.

Insurance Policy

A contract between an insurer and a policyholder that outlines the terms and conditions under which the insurer agrees to compensate for specific losses.