Which of the Following Is a Benefit of Instituting Deductibles

question 2

Multiple Choice

Which of the following is a benefit of instituting deductibles?

• A)Reduced moral hazard
• B)Reduced morale hazard
• C)Reduced processing costs
• D)All of the above
• E)None of the above

---

Definitions:

Optimal Output

The level of production at which a company can achieve the highest possible profit, balancing costs and revenues effectively.

Normal Profit

Normal profit is the minimum level of earnings necessary for a company to remain competitive in the market, covering its opportunity costs.

Market Equilibrium

A state where the supply of goods matches demand, leading to a stable price level for those goods.

Average Total Cost

The sum of all production expenses (both fixed and variable) divided by the overall output.