Consider a Hypothetical Market for Health Insurance

Consider a hypothetical market for health insurance. Fifty percent of the buyers of insurance are low-cost, healthy individuals who incur an average of $3,000 in healthcare costs each year, and the other fifty percent are high-cost, unhealthy individuals who incur an average of $9,000 in healthcare costs each year. Buyers know whether they are a low-cost type or a high-cost type. However, sellers of insurance do not know if a particular parson is a low-cost or high-cost type; they only know that half of the buyers are low-cost types, and half of the buyers are high-cost types. Healthy buyers would be willing to pay at most $4,000 for an insurance policy, and unhealthy buyers would be willing to pay at most $10,000.Which of the following statements is true?

A) Some, but not all, of the healthy individuals will purchase an insurance policy.
B) The maximum price of an insurance policy will be $3,000.
C) The minimum price of an insurance policy will be $9,000.
D) The insurance provider will implement adverse selection to reject the unhealthy individuals.