The state health care commission is planning to put out bids for care. Physician Group A is considering making a bid but is unsure how much to bid. Group A's actuary has developed four options: bid a price per capita of $1,000, $800, $600, or $400. Group A currently has a wealth level of $1,000. Added profits associated with each level are provided in the accom?panying table. Also provided in this table are the estimated probabilities of each of the four bids being accepted and Group A's utility of each wealth level. Given that Group A is a risk averse, utility-maximizing entity, what bid should it make?

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The Answer of The state health care commission is planning to put out bids for care. Physician Group A is considering making a bid but is unsure how much to bid. Group A's actuary has developed four options: bid a price per capita of $1,000, $800, $600, or $400. Group A currently has a wealth level of $1,000. Added profits associated with each level are provided in the accom?panying table. Also provided in this table are the estimated probabilities of each of the four bids being accepted and Group A's utility of each wealth level. Given that Group A is a risk averse, utility-maximizing entity, what bid should it make?

The State Health Care Commission Is Planning to Put Out