b. Under second degree price discrimination, the monopolist does not know who is what type.

What two packages of insurance level x and price P (that can have a per-unit price plus a fixed charge) will the monopolist offer? (Hint: You can assume that, if consumers are indifferent between two packages, they each buy the one intended for them.)

c. Is the outcome efficient? Are consumers likely to prefer it to other monopoly pricing strategies?