(Consider This) Martha's Milkshake Company buys earthquake insurance from the Stable Ground Insurance Company.Based on this purchase,economists would conclude that:

A) Martha's believes a damaging earthquake is imminent.
B) Stable Ground believes no damaging earthquakes will occur.
C) Martha's has a lower tolerance for earthquake risk than Stable Ground.
D) Martha's has a greater tolerance for earthquake risk than Stable Ground.

Question

Tyshekia Turner · Accepted Answer

Final Answer : C, Explanation :  Martha's Milkshake Company has a lower tolerance for earthquake risk than Stable Ground Insurance Company because Martha's purchased earthquake insurance from them to mitigate the potential losses due to an earthquake. Stable Ground may still believe that an earthquake is possible but may have a higher risk tolerance and not need to purchase as much insurance.

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