Suppose a Comprehensive Plan Applies to 2,000 Low-Risk People and 1,000

Multiple Choice

Suppose a comprehensive plan applies to 2,000 low-risk people and 1,000 high-risk people opting for insurance coverage.If the average claim submitted by low-risk people is $200 while that submitted by high-risk people is $2,000, what would be the net benefit accrued by a high-risk person paying the break even premium charged by the insurance company?

A) -$300
B) $1,800
C) $1,200
D) -$400