In this book, pp. 484, Varian writes that: "the monopolist would like to offer $x^0_1$ at price $A$ and to offer $x^0_2$ at price $A + B + C$", and that this is not compatible with self selection. On to your question now; In this diagram, Varian must imply that the producer will earn the amalgamation of each individual's willingness to pay in a ...


"Lemonization" I guess. I didn't exactly make up that term with that meaning, but I suspect you won't see it often.

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