EBK MANAGERIAL ECONOMICS
4th Edition
ISBN: 9781305483170
Author: FROEB
Publisher: YUZU
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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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