An Auto Insurance Company Was Interested in Investigating Accident Rates

question 26

Multiple Choice

An auto insurance company was interested in investigating accident rates for drivers in different age groups.The following table was based on a random sample of drivers and classifies drivers by age group and accident rate. Age Group $$\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Number of accidents } \\\text { in past 3 years }\end{array} & \text { Under 25 } & 25 - 45 & \text { Over 45 } \\\hline 0 & 0.124 & 0.194 & 0.386 \\\hline 1 & 0.079 & 0.071 & 0.080 \\\hline > 1 & 0.030 & 0.019 & 0.017 \\\hline\end{array}$$ Suppose one of these people is selected at random.Compute the probability that the person has had more than one accident in the past three years.

• A)0.232
• B)0.230
• C)0.066
• D)0.030
• E)0.296

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Definitions:

Monopolistic Producer

A company or entity that is the sole supplier of a particular product or service, giving it significant control over market price and production.

Monopolistic Distributor

A market scenario where a single distributor controls the majority of the supply of a particular product, thereby having significant influence over its distribution and pricing.

Monopolistic Producer

A single producer or a company that has exclusive control over the supply of a particular good or service, making it the only entity in the market capable of determining price and output levels.

Marginal Cost

The expense incurred from the manufacture of an extra single unit of a product or service.