A lower deductible on an insurance policy is inefficient when its marginal cost is greater than the marginal benefit of additional coverage.

Name: A lower deductible on an insurance policy is inefficient when its marginal cost is greater than the marginal benefit of additional coverage.
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Question

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When the marginal cost of lowering the deductible exceeds the marginal benefit, it means the additional cost of coverage is not justified by the value it provides, making it inefficient.

A Lower Deductible on an Insurance Policy Is Inefficient When