How might making more classes of insurance compulsory impact supply and demand?

Making more classes of insurance compulsory would likely create greater demand for those insurance products. When a type of insurance becomes mandatory, individuals and businesses are required by law to purchase it, which directly increases the number of purchasers. This uptick in requirements drives demand upwards because it eliminates the option for consumers to opt-out of coverage.

As consumers are mandated to comply with these regulations, it leads to a significant influx of policy purchasing. Consequently, suppliers must respond to this increase in demand by ensuring that they have the necessary capacity and resources to provide the required coverage. This dynamic often results in expanded offerings in the market and can potentially lead to competitive pricing as insurers seek to attract this newfound base of compulsory customers.

In contrast, making insurance compulsory does not create conditions for demand to remain static or diminish, as indicated by the other choices; there will be a clear increase in the necessity and urgency for the products involved.