In a particular insurance market,there is a decrease in the degree of risk aversion among buyers.Holding everything else constant,the equilibrium premium will _____ and the equilibrium quantity of insurance will _____.
A)increase;increase
B)decrease;decrease
C)increase;decrease
D)decrease;increase

Question

Quizplus · Accepted Answer

When the degree of risk aversion among buyers decreases, they are less willing to pay high premiums for insurance, leading to a decrease in the equilibrium premium. Additionally, with lower risk aversion, buyers are less inclined to purchase insurance, resulting in a decrease in the equilibrium quantity of insurance.

In a Particular Insurance Market,there Is a Decrease in the Degree