What is the basic difference between liability insurance and collision insurance?
a. liability insurance covers only medical injuries, and collision insurance covers only property damage.
b. liability insurance covers damage that you cause, and collision insurance covers damage done to your vehicle.
c. liability insurance is optional, but most states require collision insurance.
d. liability insurance protects against theft or vandalism, and collision insurance covers against accidents or crashes.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?