Question

The potential market represents all active duty military​ members, all​ veterans, and their families. Assume that according to the United States Department of​ Defense, as of December​ 31, 2014 there were

1 comma 361 comma 0771,361,077

active duty personnel in all armed services. The veteran population totaled 21 million at the end of 2014. Assuming the average cost of life insurance is

​$710

per year and that potential customers purchase one policy per​ year, use the chain ratio method to calculate the market potential for life insurance in the military market.The number of buyers in the market can be estimated as

nothing.

​(Round to the nearest whole​ number.)

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Answer 1

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Answer:

a)

Using chain ration method, a base number is multiplied with a chain of related percentages.

Total personnel (active + veterans) = 1361077 + 21*10^6 = 22,361,077  (Number of BUyers)

b)

Average cost of life insurance = $ 710 per year

Potential customers purchase one policy per year

Therefore, market potential/demand = 22361077*1*710 = $ 15,876,364,670

= $ 15,876 million