Although They Have Never Been Charged with a DUI, Glen

Multiple Choice

Although they have never been charged with a DUI, Glen and Dale often drive while intoxicated and each made 3 claims for auto accidents in 2010. If Crown Insurance decides to raise the price of insurance coverage for all its policy holders to $3,000 per year to off-set the claims of this type of driver, then its attempt to counter

A) the moral hazard problem will be satisfactorily addressed.
B) adverse selection will cause the low-risk policy holders to cancel their policies.
C) the moral hazard problem will cause the high-risk group to cancel their policies.
D) the adverse selection will be satisfactorily addressed.