Suppose that the Live-Long-and-Prosper Health Insurance Company charges 5,000 annually for a family insurance policy. The companys

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Suppose that the Live-Long-and-Prosper Health Insurance Company charges €5,000 annually for a family insurance policy. The company’s president suggests that the company raise the annual price to

€6,000 in order to increase its profits. If the firm followed this suggestion, what economic problem might arise?

Would the firm’s pool of customers tend to become more or less healthy on average? Would the company’s profits necessarily increase?

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Economics

ISBN: 9781408093795

3rd Edition

Authors: Mark P. Taylor, N. Gregory Mankiw

Question Posted: Nov 04, 2024 07:00 AM

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Suppose that the Live-Long-and-Prosper Health Insurance Company charges 5,000 annually for a family insurance policy. The companys

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Economics

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