The large price difference between 1920x1080 and 1920x1200?

There are cheaper 1920x1200 monitors, but there is a good reason why the expensive ones cost so much. Most cheap monitors (including all 1920x1080 monitors) use a panel technology called Twisted Nematic (TN). While cheap and low power, this does not allow for very good viewing angles or black levels, and can have inaccurate color. The expensive panels use either Vertical Alignment (VA) panels, or In Plane Switching (IPS) panels, which have significantly better color, viewing angle, and black level. I have a Dell Ultrasharp 2408WFP for example, which uses an S-PVA panel.

Exactly what monitor models are you comparing?

As [b]cjl[b] has pointed out, the panel technology itself is the largest cost of a monitor. I have both cheap and expensive monitors at home and I definitely prefer expensive monitors due to color quality, image quality and a whole host of other things which may not matter for the average person.

Average price of all monitors?

You need to specify / look at the exact model. Prices can vary for the same mode from store to store. Brink & mortar stores (walk-in) prices are generally higher.

Example: The Planar PX2611w costs from $770 - $900 online.