In a town with exactly 1,000 residents,60 percent of the residents make healthy choices, and 40 percent of the residents consistently make unhealthy choices. The health insurance company in town cannot tell, in advance, who is healthy and who is unhealthy. A healthy person has an average of $600 in medical expenses each year and is willing to pay $800 for insurance. An unhealthy person has an average of $2,100 in medical expenses each year and is willing to pay $2,400 for insurance. The health insurance provider can offer insurance at only one price.

a. In equilibrium, what is the minimum price of insurance?
b. In equilibrium, who will buy insurance?