Business, 21.02.2020 02:35, mustafakhalil02

Coverall, Inc., an insurance company, recently moved into the motorcycle insurance market. Coverall was concerned that the most likely motorcycle insurance customers are those who ride their motorcycles recklessly, because they would benefit most from insurance coverage. Since Coverall cannot distinguish perfectly between high-risk and low-risk cyclists, it raised its motorcycle premiums in an effort to account for the reckless riders.

The economic problem in this story is known as:

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Coverall, Inc., an insurance company, recently moved into the motorcycle insurance market. Coverall...