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Figure 14.C.9

If the monopolist offers points A and B, then the H types would choose B

(since they are indifferent), they would be fully insured, and the risk

h neutral monopolist would make profits from their choice. The L types, however, would prefer the point A to B and no profits would be made from them If the proportion of High types is large enough, then the monopolist will find it profitable to slightly insure the L type at the cost of raising the utility

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