The paper focuses on efficiency under monopoly. Contrary to common wisdom, nine examples given in the paper show that a Pareto-efficient output in monopoly is possible under both linear and nonlinear pricing. Pareto efficiency can be achieved when consumers are homogeneous as well as...

We analyze nonlinear pricing problem under monopoly using two hidden types of agents with linear demands and fully characterize all possible optimal solutions for both ordered and non-ordered demands. We show that both optimal packages can either contain Pareto-efficient quantities or one...