When the price of automobile insurance increases sharply, the likely impact on the market for automobiles is:

Question

Quizplus · Accepted Answer

An increase in the price of automobile insurance represents an increase in the cost of owning and operating a vehicle. This increase in cost is likely to decrease the demand for automobiles as consumers are less willing to pay the higher overall cost of owning a car. Thus, the likely impact on the market for automobiles is a decrease in demand.

When the Price of Automobile Insurance Increases Sharply, the Likely