Multiple Choice
The figures show two auto insurance markets, one market for safe drivers and one market for aggressive drivers.
-In a separating equilibrium,there is ________ of insurance in the market for safe drivers,and there is ________ of insurance in the market for aggressive drivers.
A) overprovision; underprovision
B) overprovision; overprovision
C) underprovision; underprovision
D) underprovision; overprovision
E) an efficient quantity; an efficient quantity
Correct Answer:
Verified
Correct Answer:
Verified
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