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capella234 capella234
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A year ago
Pooling

Suppose there are 100 people in a town, Divergent. Fifty are low-risk and fifty are high-risk. Low-risk people have an average of $1,000 in medical expenses each year and are willing to pay $1,200 for medical insurance. High-risk people have an average of $36,500 in medical expenses each year and are willing to pay $43,800 for medical insurance. Insurance companies cannot tell who is low-risk and who is high-risk. How much will the insurance company make if it offers medical insurance at $18,750.
Please round your final answer to two decimal places.

▸ $18,750

▸ -$887,500.00

▸ $0.00

▸ $887,500.00
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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CrazyW27CrazyW27
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A year ago
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