Which of the Following Is True About Product Liability Insurance

question 37

Multiple Choice

Which of the following is true about product liability insurance?

• A)Start-up companies can always meet the insurance company's requirements for product liability insurance.
• B)Start-up companies often have difficulty obtaining product liability insurance.
• C)A company's annual sales is not relevant in obtaining product liability insurance.
• D)Insurance premiums for start-up companies are low.
• E)The purpose of the product is not relevant in obtaining product liability insurance.

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Definitions:

Yield Pricing

A pricing strategy in which prices are adjusted based on the demand and supply of goods or services to maximize revenue.

Theory of Constraints

A management philosophy focused on identifying and managing bottlenecks that limit a system's performance, effectiveness, or profit potential.

Product Cost Distortion

When the actual cost of a product is inaccurately allocated, leading to misleading cost information and potentially flawed pricing decisions.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed, and should not affect future business decisions.