One implication of asymmetric information in the insurance market is that many low cost consumers who are not eligible for a group plan will carry individual insurance.

Question

Quizplus · Accepted Answer

Asymmetric information in the insurance market often leads to adverse selection, where insurers cannot accurately price premiums due to lack of information about individual risk. This can result in higher premiums, deterring low-risk (low cost) consumers from buying insurance, rather than encouraging them to carry individual insurance.

One Implication of Asymmetric Information in the Insurance Market Is