Other
Insurance Revenues/Microeconomics

Question Description

I’m studying for my class and need an explanation.

When a company decides to change the price of a product, it knows the demand for that product will change as a result. Elasticity measures this change in demand as a result in the change in price.

In an effort to increase revenue for the insurance industry, all insurance companies increased prices by 20 percent. To its dismay, only a 10% increase in revenue was received instead of the 20% increase that was expected.

Prepare an essay that addresses the following questions:

  • What does this say about the elasticity demand for insurance products?
  • What were the insurance companies assuming the elasticity demand would be?

Remember APA Format; Title Page, In text citations, Spelling, Grammar, Reference Page, Academic Resources


Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

neacy (1312)
UIUC

Anonymous
The tutor was pretty knowledgeable, efficient and polite. Great service!

Anonymous
Heard about Studypool for a while and finally tried it. Glad I did caus this was really helpful.

Anonymous
Just what I needed… fantastic!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4