Amarket analyst is developing a regression model to predict monthly household expenditures on groceries as a function of family size, household income, and household neighborhood (urban, suburban, and rural). the "neighborhood" variable in this model is

With signals from no-claim bonuses and deductibles, a. the marginal cost curve for careful drivers lies to the left of the marginal cost curve for aggressive drivers b. auto insurance companies insure more aggressive drivers than careful drivers because aggressive drivers have a greater need for the insurance c. the market for car insurance has a separating equilibrium, and the market is efficient d. most drivers pay higher premiums than if the market had no signals