The figures show two auto insurance markets, one market for safe drivers and one market for aggressive drivers.
-In a separating equilibrium,there is ________ of insurance in the market for safe drivers,and there is ________ of insurance in the market for aggressive drivers.
A) overprovision; underprovision
B) overprovision; overprovision
C) underprovision; underprovision
D) underprovision; overprovision
E) an efficient quantity; an efficient quantity

Question

The figures show two auto insurance markets, one market for safe drivers and one market for aggressive drivers.
-In a separating equilibrium,there is ________ of insurance in the market for safe drivers,and there is ________ of insurance in the market for aggressive drivers.
A) overprovision; underprovision 
B) overprovision; overprovision 
C) underprovision; underprovision 
D) underprovision; overprovision 
E) an efficient quantity; an efficient quantity

Quizplus · Accepted Answer

The Answer of  
The figures show two auto insurance markets, one market for safe drivers and one market for aggressive drivers.
-In a separating equilibrium,there is ________ of insurance in the market for safe drivers,and there is ________ of insurance in the market for aggressive drivers.
A) overprovision; underprovision 
B) overprovision; overprovision 
C) underprovision; underprovision 
D) underprovision; overprovision 
E) an efficient quantity; an efficient quantity

The Figures Show Two Auto Insurance Markets, One Market for Safe