Problem
Consider the Rothschild-Stiglitz adverse selection model that we discussed in the class. Suppose a competitive insurance company proposes an insurance policy that provides full insurance to all individuals, regardless of their risk types. Can such a policy be sustained as a Rothschild-Stiglitz equilibrium?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.