An insurance company offering both high-deductible and low-deductible plans is an example of:
A)signaling.
B)statistical discrimination.
C)building a reputation.
D)screening.

Question

Quizplus · Accepted Answer

Screening is a strategy used by sellers to distinguish between different types of buyers. In this case, by offering both high-deductible and low-deductible plans, the insurance company allows customers to self-select based on their own risk assessment and health status, which is a form of screening.

An Insurance Company Offering Both High-Deductible and Low-Deductible Plans Is