By offering a menu of policies with different premiums and deductibles,insurance companies can _____ their customers;for example,a low-risk customer will often buy insurance with a lower _____ but a higher _____ than a high-risk customer.
A)signal;deductible;premium
B)signal;premium;deductible
C)screen;deductible;premium
D)screen;premium;deductible

Question

Quizplus · Accepted Answer

Insurance companies use a strategy called "screening" to differentiate between low-risk and high-risk customers. Low-risk customers typically prefer policies with lower premiums and higher deductibles, while high-risk customers opt for higher premiums and lower deductibles.

By Offering a Menu of Policies with Different Premiums and Deductibles,insurance