Figure 9.6 -Figure 9.6 Represents the Market for Health Insurance. Suppose There

Multiple Choice

Figure 9.6
-Figure 9.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. If $Y is the price the insurance company would charge if it expected 40% of its customers to be high-cost, the price it would charge if it expected 50% of its customers to be high-cost would be

A) greater than $Y.
B) less than $Y.
C) equal to $Y.
D) 50% of $Y.