Assume That an Insurance Company Sets a Single Price for Insurance

question 360

Multiple Choice

Assume that an insurance company sets a single price for insurance equal to the total medical bills paid by the insurance company divided by the number of its customers. If it pays medical bills of $5,000 for half of its customers and $9,000 for the other half of its customers, the price of insurance will be

• A) $5,000.
• B) $6,000.
• C) $7,000.
• D) $9,000.

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