As the premium for an insurance policy rises, there is a(n):
A)decrease in the demand for insurance.
B)increase in the supply of insurance.
C)decrease in the quantity demanded of insurance.
D)decrease in the supply of insurance.

Question

Quizplus · Accepted Answer

As the premium for an insurance policy rises, there is a decrease in the quantity demanded of insurance. This is because higher premiums make insurance less affordable for consumers, causing them to either reduce the coverage they purchase or opt not to purchase insurance at all. This does not affect the supply of insurance available in the market.

As the Premium for an Insurance Policy Rises, There Is