Explain the relationship between community rating and economic efficiency?
For unlimited access to Homework Help, a Homework+ subscription is required.
Some states have proposed requiring community rating - that is, insurance companies would not be allowed to charge individuals different premiums, regardless of their health, age, or sex; everyone in the community would pay the same premium. Discuss the possible consequences of community rating. Evaluate such proposals from the perspective of equity and efficiency.
What is the relationship between total surplus and economic efficiency?
Ā