. Suppose that the Long - Life Health Insurance Firm charges $ 5,000 annually for a family insurance policy . An advisor suggests that the company raise the annual price to $ 6,000 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 profit necessarily increase

. Suppose that the Long - Life Health Insurance Firm charges $ 5,000 annually for a family insurance policy . An advisor suggests that the company raise the annual price to $ 6,000 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 profit necessarily increase

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

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