These two variables are sufficiently large as to prevent any form of price equalization.

Stiglitz (1977) noted that the conventional theory of monopoly has in a way been restrictive in an unnecessary manner in regard to two main aspects. The first aspect is that the monopolists will generally tend to charge their clients amounts that are proportional to the quantity that they consume (This is referred to by Stiglitz (1977) as the liner price schedule).Such a policy is noted by Stiglitz (1977) to never lead to profit maximization. The non-liner price schedules are noted to be desirable when feasible. Monopolists are however noted to introduce various forms of inefficiencies due to factors such as secondary resale markets or sue to the fact that individuals differ. These are noted as the discriminating aspects of monopolists in the insurance sector. The second aspects of the conventional theory of monopoly in regard to...
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