Assume standard or conventional insurance theory
Given
Uninsured price = $2,000
no. of operations if uninsured = 1
When insured,
p = 40%
no of operations - 3
What is the insured price? What is the social loss?
O $800: $1.200
O $800; zero
O $800: $3,600
O $1,960, $2,400
O $800