Screening

question 91

Multiple Choice

Screening

• A) leads to a pooling equilibrium in the insurance market.
• B) means an uninformed person passes knowledge to an informed person.
• C) makes no-claim bonuses unnecessary.
• D) explains why insurance companies offer low-premium, high-deductible policies and high-premium, low-deductible policies.
• E) makes the insurance market inefficient.

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Definitions:

Price Wars

A competitive strategy where companies continuously lower prices to outdo competitors, often resulting in reduced profit margins.

Prestige Pricing

Strategies that establish relatively high prices to develop and maintain an image of quality and exclusiveness.

Demonstrations

Public gatherings where individuals display their support or opposition towards a particular cause or policy.

Prospective Clients

Potential customers who have shown interest in a company's products or services but have not yet made a purchase.