Insurance is possible and can be profitable because of A- private informatiom B- adverse selection' C-...

Insurance is possible and can be profitable because of

A- private informatiom

B- adverse selection'

C- consequence are risk aversion

D- moral hazards

E- All of the above

Expert Solution

Ans.- (C)

Consumers are risk averse and therefore they are willing to pay premium in order to get insured and hence insurance companies make profits.

Rahul Sunny answered 2 years ago

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