Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 19, Problem 1MC
To determine
Insurance premium price.
Expert Solution & Answer
Explanation of Solution
Since it is not possible to identify the reckless doctor, the insurance premium price should be equal to $30,000. When fixing this price, all the reckless doctors would buy the insurance. Thus, option ‘d’ is correct.
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Chapter 19 Solutions
Managerial Economics: A Problem Solving Approach
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