Hamlet takes full advantage of his "antic disposition" to insult Polonius. Discuss Polonius's response to the insult "You are a fishmonger," and how it serves to characterize Polonius.

In act 2, scene 2 Hamlet is playing up his "antic disposition" with Polonius and loving every minute of it. Polonius is a bit of a stick in the mud, without much in the way of a sense of humor. So he's the perfect foil for Hamlet's fooling. The young prince starts off by pretending that he thinks Polonius is a fishmonger. At that time, the fish-mongering trade was exclusively the preserve of the lower classes; it did not confer high social status. Polonius, as a courtier, is of the upper class, so for Hamlet to call him a fishmonger is quite an insult.
Whether Polonius feels insulted by this remark, he tries to humor Hamlet, playing along with his little game. Although Polonius suspects that Hamlet is just putting it on, he can't be absolutely sure; he must play along with him to try and establish what's really going on in that strange mind of his.
In the meantime, Polonius is puzzled as to why Hamlet should have mistaken him for a purveyor of fish. He concludes that there's only one possible explanation: Hamlet is feeling lovesick. Polonius is such a snob that the very idea of being mistaken for a member of the lower classes can only be explained by a fit of insanity. In the hierarchical world of which Polonius is such a proud member, comparisons between the upper and lower classes can only be made by those who've taken leave of their senses. To suggest otherwise is simply too horrible for Polonius to contemplate.