Suppose that the Live-Long-and-Prosper Health Insurance Company charges $5000 annually for a family insurance policy. The companys

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Suppose that the Live-Long-and-Prosper Health Insurance Company charges $5000 annually for a family insurance policy. The company’s president suggests that the company raise the annual price to $6000 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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Principles Of Microeconomics [Australia And New Zealand Edition]

ISBN: 9781337408066

6th Edition

Authors: Joshua Gans, Stephen King, Martin Byford, N. Gregory Mankiw

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