When a firm experiences increasing returns to scale

Holding all other things constant, when the price level rises, interest rates:

a. rise and firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding. b. rise and firms will want to borrow less for new plants and equipment and households will want to borrow less for homebuilding. c. fall and firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding. d. all of the above

Figure 9.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% of its customers are high-cost type. If the insurance companies set the price equal to their average cost per customer, what type of customers will dominate the market?

A. low-cost customers B. high-cost customers C. Both types equally split the market. D. There is not sufficient information.