CII 530 Practice Questions - Economics And Business (530) Exam

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When the price of a commercial liability insurance policy increases by 10%, the quantity of policies demanded in the broker market decreases by 15%. What is the Price Elasticity of Demand (PED) and how is it classified?

PED = -0.67 (Inelastic) PED = -1.50 (Elastic) PED = -1.00 (Unitary elastic) PED = -0.15 (Perfectly inelastic)

Correct Answer:

PED = -1.50 (Elastic)

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