The paper refers to whether a monopolist should set different prices to the two types of customers (high value or low). They find that the answer is no. The pa

The paper refers to whether a monopolist should set different prices to the two types of customers (high value or low). They find that the answer is no. The part that is confusing you (I think), is in the next paragraph, where the paper then finds that if the monopolist however offers an enhanced service based on purchasing history, it does become optimal to set two different prices. Also by "never profitable", they don't mean that the monopolist won't make any profit, it's just that they won't be able to increase profit.