An implication of asymmetric information in the insurance market is that the price of health insurance may reflect the costs of a healthier-than-average person.

Question

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Asymmetric information in the insurance market often leads to adverse selection, where insurers cannot accurately differentiate between high-risk and low-risk individuals. This typically results in the price of health insurance reflecting the costs of a less healthy-than-average person, as insurers raise premiums to cover the higher risk of insuring individuals with unknown health statuses.

An Implication of Asymmetric Information in the Insurance Market Is