So, we will continue our discussion on theory of perfect competition. So, if you remember in the last class, we discussed about the long run price and output decision. Then we talked about that when there is a imposition of tax generally, who takes the maximum load, whether it is the buyers or whether it is the sellers. And then we examine the case of stock market, whether this is part of perfect competitive market structure or not. Then we will take one more example today in order to understand that whether there is an application of competitive market in the real world or whether there is evidence of perfect competitive market, form of perfect competitive market structure in the real world. So, generally we will take the example of the credit card industry. And if you see credit card industry seems to be a concentrated industry, visa, master card and American express are the most familiar names and over 60 percent of all charges made using one of these three cards. So, if you look at if you are holding a credit card, either it is a visa card, either it is a master card or it is a American express card. So, maybe they originate from different financial institutions or different banks, when it comes to type of cards, either it is American express, master or visa card. And if you look at 60 percent of all charges are made using one of these three cards. So, when it comes to the characteristic of perfect competitive market structure and this credit card industry, the number and size distribution of buyers and seller is somehow comes to a equal characteristic because there are large number of buyers. If you look at people, they prefer to use more credit card rather than debit card or operating in cash and there are number of sellers, like if you take any bank specifically, whether it is a small in size, but still they offer a credit card, at least to those people, those who are holding a account in their bank. So, there are large number of credit card service provider and also there are large number of users of the credit card, which has some similarity with the characteristic of a perfect competitive market structure that there are large number of buyers and large number of sellers. And although these card are the choice of the majority of consumer, these card do not originate from the same firm. So, number of firms, but if you look at the product, the credit card is the product which comes from the number of firms, but if you look at it is a identical product because it is a credit card. Similarly, if you look at it is a relatively homogeneous product because the utility of the product is remain same, whether it comes from HDFC bank, whether it comes from ICICI, whether it comes from SBI, whether it comes from any of the banks, the usefulness or the utility of the product is the homogeneous product. So, credit cards are relatively homogeneous product, even if it originate from the different firms, still it has the same utility or the same usefulness and that is why it is a relatively homogeneous product. Entry into and exit from the credit card market is easy, like if you have a repaying capacity, generally you get a credit card. So, there is also entry into it and exit from the credit card is also like you can just get out of it after paying all this due. This is from the consumer perspective and from the firm's perspective also, there is no hard and fast tool that whether you should offer a credit card or not. If the bank has the capacity to offer a credit card, generally the firm or the bank they offer it or otherwise they generally exit if they are not feel that it is not a profitable business for the firm. So, it would seem that the credit card industry meet most of the characteristics that could be perfectly competitive market, at least when it comes to large number of buyers and sellers, when it comes to homogeneous product, the number of buyers and sellers in the product they are large. It is a homogeneous product because the usefulness of the product is that it remains same whether it comes from the bank X or firm X or firm Y or when it comes to the entry restriction, there is no entry barrier, there is no entry restriction, there is free entry into free exit into the firm. Now, the question comes is there any imperfection here in case of the credit card industry. May be the when you talk about the imperfection, yes because when you analyze it, it is not the same product because we get different category, there is a product differentiation because what facility we get it in the master card that we do not get in the visa card and that we do not get in the American express card and otherwise also if you take it in a different angle, what facility we get it in the American express card or a visa card, we do not get it in the master card. Similarly, when you talk about that homogeneous product, again the homogeneous product may be different because if you look at the cap like the what is the credit card limit, may be for one card limit is 40, if it is a gold card, if it is a platinum card or if it is a again there are different scheme, the credit card different schemes are coming and in that case you get different cards into the different cards and different credit limit and also the different cases sometimes we get the cash pack offer. So, if you analyze the product in that angle, again the question comes whether it is a homogeneous product may be that time the answer is no. Similarly, free entry and free exit may be also a relative concept, if you analyze it may be again it is not fit to a perfect competitive market structure. So, may be out of these outliers again when it comes to a comparison between the credit card industry and whether it is a perfect competitive market structure may be closely the answer is yes because at least there are a few features which gets there is a resemblance with the perfect competitive market structure. So, then we will take our discussion into the next form of market structure that is the monopoly. So, in one extreme we have perfect competitive market structure and the other extreme we have the monopoly. So, in today's session we will talk about the features of monopoly. So, if you look at perfect competitive is the one form where there is no competition at all there are large number of firms and in the other end we have the monopoly where there is a single firm there is no close substitute product. So, two extremes so we have already discussed about the perfect competitive market structure. Then we discuss about the monopoly and we will do a comparative assessment between the perfect competitive market structure and the monopoly market structure. So, in today's session we will talk about the features of monopoly. We will find out what are the reasons for monopoly generally why the market emerge in the form of the monopoly. Then we look at what are the different types of monopoly. We will check the demand and marginal revenue for a monopoly how it is generally derived. Then we will talk about the price and output decision in the short run and long run and then we will talk about the supply curve of the monopoly firm and how the general measurement of the monopoly power is done. So, the word monopoly comes from a Greek word mono that is single and polo that is sell. So, it is a form of market where the single seller sell a product which has no close substitute. So, we can do a quick mind game over here that when we think about a product immediately we need to find a substitute.  So, if you look at if you closely look at there are some form of substitute is not there may be sometime it is close substitute sometimes it is the distance substitute. Like if you look the case of railway may be there is no close substitute the railway, but there are some distance substitute like when you take the take the mode of travel as air take the mode of travel by road there are substitute available railway is not the only products available in the market. So, that is the reason when at least for a product we get close substitute or distance substitute we cannot call it monopoly it is not pure monopoly because still some close or the distance substitute available. Similarly, when you talk about monopoly and we are always saying that is the extreme form of a market structure can we get the evidence of pure monopoly in the real world may be the answer is again no either it is a monopoly because of regulation either it is a monopoly because of the natural factors or may be it is a economic monopoly, but again you take a specific example suppose it is rock suppose it is salt. So, for the time being when you do when you think over it may be there is no close substitute to salt because this is the only product and if you want to use salt that is the only form of product there is no close substitute, but you think it over again it is not salt there is also a substitute that is called rock salt right. So, may be the product there are few products in the market if you look at that is the only product in the market, but still it has some substitute. So, we cannot say there is one product which has no substitute and that is the reason we can say that there is no pure monopoly at least in case of a real market real world situation or the market situation because it is pure monopoly is one where there is no close or no distance substitute should be available in the market and that is quite hard to find in the real world example and that is why we say that may be the monopoly comes in the form of regulator the monopoly comes in the form of the natural factor, but not as a pure monopoly and that we will discuss in the due course of time that what is the different kind of monopoly and how they have formed or how they have emerged themselves as a monopoly market in the market in the real world situation. So, when you look at the features of monopoly there are single seller single product there is no difference between the firm and the industry because it is the single product and the firm produces all the individual firms or the number of plants they produces all the product. So, it is not number of firms it is the industry there is no difference within the firm and industry because there is a single seller who sells or producer sells the entire product that is required in the market independent decision making because there is no competitor. So, the existing firm has not has to take care of the what will be the competitor reaction when it comes to regarding the decision about the price and output. So, in this case there is a independent decision making and also one of the significant feature of the monopoly market structure it is a restricted entry and why we call it a restricted entry because there is a entry barrier maybe sometime this is man made otherwise it is natural also there is a entry barrier whenever a firm interested to produce a product it is not that it is free it is not that they can just entry into the market and they can produce and they can sell it in the market. So, that is the reason this form of market is different from the other form of market because at least there is no entry barrier in case of the other market, but in this case specifically there is a entry there is a entry barrier. Then we can analyze that whether it comes natural or whether it comes as a whether it comes there is a reason behind this monopoly. So, the main cause or the main reason that monopoly generally arise from the barrier to entry and there is a entry barrier and that leads the market into the monopoly market. Now, what are the entry barriers over here the barrier to entry before getting into the what are the different kind of entry barrier we can say what is barrier to entry or how generally we define the barrier to entry anything that impets the ability of the firm to begin a new business in an industry in which the in which existing firm of earning positive economic profit. So, it is a kind of situation any factor which stops the new firms or the which stops the firms to get into that business is generally the generally known as the entry barrier because that generally create a barrier for the new firms to enter into the market where the existing firm they are getting the economic profit there or they are getting the normal profit they are getting the super normal profit. Then we will see where the where what is the source for this barrier to entry barrier to entry is any factor which stops the entry of new firm into the industry or start a new business into the industry. So, what would be the sources of the barrier of entry or generally from where this entry barrier comes first when the firm they have a ownership of a key resources generally this that stop the other firms to enter into the market because they have the ownership of key resources and that is the reason they have also ownership to produce the product in a more cost effective manner. Any new firm enter into the market they have to get the resources which may be more costly as compared to the cost of production of the other firms who is who is having the ownership of the key resources. Second the when the government gives a single firm the exclusive right to produce some goods like if you look at everybody cannot produce the equipment required for defense the government gives the single firm the exclusive right to produce some goods. So, here it is a regulation that creates a entry barrier for the other firms to enter into the market. Third sources of source of barrier to enter is the cost of production make a single producer more efficient than a large number of producer. So, cost of production so if you remember in case of cost analysis we discussed about the economies of scale. So, there are different stage when the firm expanding the scale of operation at a lower cost of production from expanding the scale of operation at a constant cost of production and from expanding the scale of operation in a increasing cost of production. So, in this case if the existing firm they are operating the scale expanding the scale of operation at a lower cost of production they get the cost advantage and they get the enjoy the economies of scale which may not be possible for the new firms to enter at that stage in case of the market because the existing firm they are producing the product at a lower cost of production. Any new firms they enter into the market they have to any new firms enter into the market generally they have to compete with the existing firm at a higher cost of production and which may not be profitable for them and that stops them to enter into the market because the cost of production make the single producer more efficient than the large number of producer. So, generally barrier to entry comes from three sources one when the firm is the ownership of key resources used for the production. Second the government gives the single firm the exclusive right to produce something and third the cost of production make the single producer more cost effective than the large number of producer is in the market. Then we will see what are the types of barrier or what are the common entry barriers the first one is economies of scale. So, when the long run average cost declines over a wide range of output relative to the demand for the product there may not be room for another large producer to enter the market. Like in the previous case we are examining that when one large firm is producing at a lower cost of production there is no scope for the other firms to enter into the enter into the market producing at a higher cost of production and competing with the existing firm. So, in the existing firm is enjoying the economies of scale they are producing the product in a most cost effective manner and that reduces the scope of the other firms to enter into the market. So, when the long run average cost declines over a wide range of output relative to demand for the product there may be there may not be room for the another large producer to enter the market and this serve as a one kind of entry barrier battery. Then barriers created by the government license exclusive franchises if it is given by government then let that creates as a entry barrier like we are taking the we are talking about the example of the supplier of the defense equipment. Everybody cannot get into the market it should be through the government when they are giving exclusive franchises when they are giving a license to do that then only they can get into this and this serve as a entry barrier for the other firms into the market and they emerge as a monopoly leader. Then we have input barrier that is one firm control the crucial input in the production process like if someone is having the key ownership of the resources whether it is a technical law how like you can take the example of IBM who specializes in the main frames. So, any firms they enter into this may be they are not the specialized because the IBM they are holding a crucial input in the production process of the main frame and that serve as the input barriers for the other firms to enter into the market. Then brand loyalty strong customer allegiance to existing firm may keep new firm from finding enough bias to make entry worthwhile. Like you can take the example of Johnson and Johnson it is like for the baby product if you look at they are the market leader because still the time people they have the brand loyalty. There are many more brand it has come in the market in the recent time, but if you look at people they have still the brand loyalty for the people and that makes them the that makes them actually the firm to become monopolist and brand loyalty serve as a input entry barrier. Like Microsoft when it comes to the window or when it comes to the any other Microsoft process we always say that Microsoft is the market leader. So, the brand loyalty for the Microsoft generally takes the other firms out of this market and that is why it serve as a entry barrier because people they have a confidence on the brand they have the loyalty for the brand and which acts as a barrier to the other firms to enter into the market. Then we have something called consumer lock-in and what is this consumer lock-in when the potential entrant can be deter if they believe high switching cost will keep them for inducing many consumers to change the brands. Like sometimes the switching cost from one brand to another brand puts the consumer into the lock-in situation and that leads to that leads to the situation where the other firms they cannot enter into the market. Like you can take the example of a mobile service provider when you have one connection from one mobile service provider you do not change that easily because it again use a again leads again requires a switching cost or the high switching cost because it is may be high but there is some amount of the switching cost may be in case of mobile service provider at least when you need to buy a sim when you need to put a recharge card and which is to which generally consider as a part of the switching cost. So, generally when people they move from one product to another product they look at what is the switching cost available with this. So, if the switching cost is high generally people they take this to a that takes as the if the switching cost is high and let me not get into the change into the other product I am ok with this product. So, this thought process itself because the consumer is not changing the brand because there is a high switching cost that leads to the entry barrier for the firm into the other firms into the market. Similarly, we have network externality which serve as a entry barrier it occurs when the value of a product increases such more consumer buy and use it and make it difficult for new firms to enter the market where the firms have established a large network of buyers. So, when we are moving to a new place you can take the example of a we can take the example of a maybe it is a phone connection or it is can be a buying a laptop buying a computer. Generally, how do you take a call that which one to buy you say that which product is more common in this area whether it it is a mobile service provider whether it is BSNL whether it is Vodafone whether it is Airtel and if it is you look for the tower which gets a better connectivity and what people they are using more in this market. So, that that leads to the fact or that leads to the this fact leads to the decision of the buyers that what they are buying and this is generally called as a network externality because the benefit reach to the other consumer when one consumer uses this or similarly when you are planning to buy a laptop you always say that who is the nearest service provider if it is Sonivio the nearest service provider is there you generally buy it if it is Dell if you find that the nearest service provider is there generally you buy it. So, it is about the network externality because since many firms they are using many consumer they are using the single product that that leads to the positive external benefit to the other firms in term of the other facility available with respect to that firm and that generally creates a entry barrier for the other firms to enter into the market. Then, we will talk about the types of monopoly the first one is natural monopoly it is firm when the size of the market is so small that it can accommodate only one player means the capacity of the market or the size of the market is so small that it can only accommodate one player then we have local and regional monopoly a monopoly that exist in the limited geographic area like whether it is through regulation like if you take under the this WTO rules or similarly maybe you can take another example like that local grocery store because that serve as a local monopoly because there are no other shops available in that particular region. Similarly, this regional monopoly is generally if you look at this Strip's agreement or the WTO agreement the that leads to the regional monopoly because there is a restriction for the other firms to enter into the market. Then, we have economic monopoly and economic monopoly is created whenever the competition is eliminated due to economic efficiency of other players or due to superior efficiency of a particular player. So, it is created whenever competition is eliminated due to economic efficiency of other players or due to superior efficiency of the particular player. So, maybe the efficiency is that one firm is doing really well that leads to the economic efficiency and that stops the other firms to enter into the market. Then, we have a kind of monopoly we cannot call it exactly it is a monopoly it is a act of monopoly that is monopolization where the attempt by the firm to dominate the market or become the monopoly and generally if we take the typical example of Microsoft where they are trying to get into the antivirus market and by bundling their product and that is the classic example we always take that this is the act of monopolization by the Microsoft to become a monopoly leader in antivirus market also because they are trying to do it through the bundling activity and if you remember there is also a antitrust case against the Microsoft for this monopolization act. So, it is not a kind of monopoly rather a act or rather an attempt by the firms to become a monopoly leader. Then, we have a legal or regulated monopoly it is created when the government restrict the entry of other players in particular market in order to keep the total control in hand like the typical example of Indian railway and maybe the different state electricity board. This is the regulated monopoly because this generally the government keeps all the control the government takes a call with respect to price and output decision and that leads to the generally that leads to the market or that leads to the entire market form into the monopoly market. And generally this is a kind of monopoly where the behavior is overseen by the government entity and typically the public utility sector that is generally known as the generally comes under this form of the monopoly like that example of state electricity board or it is a case of Indian railway where the behavior is overseen by the government or there is some say of the government when it comes to the price and output decision and that leads to the market as the monopoly form of market structure. Then, we will talk about the demand and monopoly demand and revenue of a monopoly market. Demand curve is downward sloping it is a regular demand curve downward sloping price and quantity demanded there inversely related and if the monopolies want to sell they have to reduce the price. So, the demand curve of monopolies is highly price in an inelastic because of this the single product available in the market and there is no close substitute that leads to the inelasticity of the monopolies and that is why the demand curve is highly price inelastic. When a monopoly drops the price to sell one more unit the revenue is received from the previously sold unit also decreases because since there is a single product and there is no close substitute sometime if the monopoly firms want to sell more they have to at least reduce the price and in this case the revenue received from previously sold unit also decreases because the price is decreasing even if the quantity is increasing. So, when a monopoly increases the amount itself it has two effect on total revenue. So, what is our total revenue? Total revenue is price and quantity. So, output effect more output is sold and Q is higher because there is a decrease in the price that leads to a output effect because Q is higher price effect price decreases. So, price is generally lower. So, whenever the monopoly increase amount itself it has to reduce the price then only the sell will be more and that is why it leads to two kind of effect one is output effect and second one is the price effect. So, here the average revenue curve denotes the demand curve for the firm and also determine the slope of the marginal revenue curve. So, average revenue curve is also the demand curve there is a same in case of a perfect competitive market structure also because the average revenue was also equal to the demand curve, but here the difference is that here the marginal revenue curve is separate, but in case of competitive market structure the marginal revenue curve is also equal to the average revenue curve and the average revenue curve also determines the slope of the marginal revenue curve. Since the demand curve is highly inelastic average revenue curve would be downward sloping and the marginal curve would lie below the average revenue curve. So, if the demand curve is highly inelastic average revenue curve will be downward sloping and marginal curve would lie below the average revenue curve and the monopolist marginal revenue is always less than the price of its good and why it is generally less than the price of its good because monopoly has to lower the price of all units of its product if it wants to sell the additional unit and the additional to the total revenue resulting from selling additional unit would be less than the price of the firm would receive for this unit. It means the marginal revenue has to be less than the price. So, MR is less than price and MR curve would lie below the average revenue curve. Now, we will see for a linear demand curve the slope of the marginal revenue curve is twice that of average revenue curve and marginal revenue curve would lie halfway between the average revenue curve and the price axis. So, for a linear demand curve the slope of the MR is twice that is slope of the air and it will lie halfway between the price curve and price axis and the average revenue curve. So, let us see the how generally we graphically look at the slope of the average revenue curve and the slope of the marginal revenue curve and we will check whether the slope of the marginal revenue curve lies below average revenue curve and algebraically also we will see what is the slope generally for the average revenue curve and whether the slope of marginal revenue curve which twice of the slope of the average revenue curve. So, if you take a demand curve that is P is equal to A minus BQ, then what will be the revenue? Revenue is PQ and if it is PQ, then it is A minus BQ multiplied by Q which leads to AQ minus BQ square and this is the total revenue. So, slope of average revenue will be B because this is dr by Q and slope of marginal revenue will be, we need to find out the slope of marginal revenue and what is marginal revenue? Marginal revenue is dr by DQ. So, that comes to D AQ minus BQ square with respect to Q and that will get it, then this is A and 2 BQ and what is the slope of marginal revenue curve? The slope of marginal revenue curve is minus 2 B. So, slope of average revenue curve is B and slope of marginal revenue curve is 2 B. So, we can conclude that the slope of marginal revenue is twice that of slope of average revenue curve because the slope of AR is B and slope of MR is 2 B. Then graphically how we generally represent this? Graphically we represent this as, this is our average revenue curve and this is the marginal revenue curve. Here we take revenue and cost and here we take the quantity and if you look at the marginal revenue curve, you just look at it lies in the half way between the average revenue curve and the price axis. So, monopoly demand curve if you look at monopoly demand curve is the average revenue curve and the slope of the average revenue curve in a typically demand function if it is A minus BQ, then it is get B and slope of marginal revenue curve is 2 BQ and 2 B. So, that leads to the slope of marginal revenue curve is the twice of the slope of the average revenue curve and for a linear demand curve always the slope the MR lies below the average revenue curve because the slope is more than the slope of the average revenue curve. Then we will come to the profit maximization of the monopoly firm. So, the profit maximizing rule is again same, marginal cost has to be equal to marginal revenue for the first order condition and the slope of the MC should be greater than the slope of the MR for the second order condition. So, monopoly maximizes the profit by producing the quantity at which the marginal revenue equal to marginal cost and then it uses the demand curve or the typical average revenue curve to find what price induce the consumer to buy that quantity. So, the first one they find out the output level by MR and MC that is the profit maximizing rule and then by using the demand they find out the price at that price what the consumer would study to buy. So, what is the steps for the profit maximization? We need to set marginal revenue is equal to marginal cost to find the queue that maximizes the profit. Then we use the market demand curve to find a P that the queue brings and then we find average total cost and average variable cost to determine profit losses or shutdown. So, the first step is to equalize marginal revenue and marginal cost find out the queue that maximizes the profit. Then we use the market demand curve to find the price that the quantity brings and finally, we will find out the cost associated with that level of producing queue because that will tell us whether the firm at that level of quantity whether the firm is incurring loss making profit or making supernova profit. So, here the profit is equal to the total revenue minus total cost total revenue is that is P queue and total cost is the fixed cost plus the variable cost.  So, if you simplify this then becomes P minus average total cost multiplied by Q and this is also called as the profit margin and the monopolist will receive economic profit as long as price is greater than the average total cost. So, till the time price is greater than average total cost monopolist will receive economic profit. If the price is equal to the average cost or the average total cost that is normal profit and if the price is below the average total cost then it becomes the loss. Take the case of in case of short run we will take the case of supernormal profit in which case generally the firm gets supernormal profit. Then we will take the case of loss like in which case the firm gets loss and in which case the firm gets the normal profit. So, to start with we will do it for the supernormal profit. So, we will find out our here we will take quantity, here we will take average revenue, marginal revenue, average cost and marginal cost. So, this is our average revenue, this is our marginal revenue, then this is our average cost, marginal cost intersect the average cost at its minimum. Now, what is the what is the steps for the profit maximization? First we need to find the equality of marginal cost and marginal revenue. So, this is the point where the first order condition gets fulfilled and corresponding to this will identify the quantity, this is the profit maximizing level of output. Next what we should do? Using the demand curve we will find out the price. So, corresponding to this we will find the price axis and this is the price. Now, this is the profit maximizing quantity, this is the profit maximizing price. This we have got through the equalization of marginal cost and marginal revenue. Now, next we need to find out at this price at this quantity what is the situation for the firm, whether the firm is getting super normal profit, whether the firm is getting the normal profit or whether the firm is getting loss. How to find out that? That is through the average revenue or so called price and the average cost. So, corresponding to this what is the average cost corresponding to this, this is the average cost and this is the price. So, P is greater than average cost. So, if you remember till the time P is greater than average cost, the firm will get economic profit or so called super normal profit. And what is the amount of the super normal profit? The difference between the average cost and the average revenue curve and this is the amount of profit super normal profit what the firm is getting. So, if the price is greater than average total cost, the amount between the average total cost and the average revenue curve that gives us the super normal profit this is above the cost of production. Now, next we will find out what is the second situation that is for the normal profit. Again we will follow the same process or the same steps to find out the normal profit. So, here we have revenue and cost, here we have quantity. We will draw our average revenue curve, we will draw the marginal revenue curve, then we will draw our average cost curve and we will draw the marginal cost curve. We have average revenue, we have marginal revenue, we have average cost, we have marginal cost. Marginal revenue, marginal cost is the to find out the profit maximizing level of output corresponding to that we get the level of output corresponding to that in the demand curve we get the price. Now, what is the next task? If this is the profit maximizing price, this is the profit maximizing output, we need to find out that what is the profit or what is the loss. So, in this case if you look at corresponding to this point the average cost is just equal to the average revenue. If average cost is equal to average revenue, the firm is incurring no loss, the firm is not incurring the super normal profit. Now, this is the case of a normal profit where corresponding to the profit maximizing level of output, the average cost is equal to the average revenue curve. Then we will analyze the case of loss where particularly the firm incurs loss when it is a profit maximizing condition. So, we have average revenue, quantity, revenue and cost, we have marginal revenue, we have average cost and we have marginal cost. We will find out the marginal revenue, marginal cost condition, we will find out the Q, we will find out the P. So, this is P, this is Q. Corresponding to this, if you will find this is the amount of the cost. So, in this case the average cost is greater than price and that leads to the loss for the loss for the firm as this much area because this gives the difference between the average cost and P. So, in this case at this level of output the average cost is higher than the price and that is why the firm is incurring loss. The common question comes here whether since it is a case of the monopolist whether the firm should incur loss or not because it is a monopolist, they have a independent capacity to take a decision on the price and output. There is only single firm, single producer, at least there is no close substitute. So, monopoly is a market firm where there is no close substitute. Now, still when the firm is incurring loss in the short run, what may be the possible reasons? There is a possibility that the firm may incur loss in the also in the short run and what are the possibility or what is the reason that the firm is incurring loss in the short run. First, maybe it is possible that in the earlier the monopolist may not be very efficient to attend the low average cost of production. Maybe the cost efficiency or maybe to attend the low average cost of production, it is not possible at the early year of the monopoly. Then the size of the market in the early years may be small. Hence, to sell the entire output firm has to incur the losses. So, the size of the market in the early year may be small not very large and to sell entire output maybe the firm has to lower the price which leads to incur or maybe evidence of loss in the short run. Then the monopoly firm deliberately charge a low price to keep the competitor out of this market. Why they charge a low price? If you remember whenever there is a super normal profit that attracts the firm other firms to enter into the industry. And if they are charging a high price that leads to super normal profit and that will attract the new firms enter into the industry and in that case maybe the competition will be there and it may not be a monopoly market again. And that is the reason they take a strategy to maintain a lower price because if you are maintaining a lower price that is not profitable for the other firms to enter into the market or there will be no incentive for the other firms to enter into the market and that is so which is an anti barrier. But in the other side when they are charging a low price generally that that leads to the loss for the firm because they are charging a low price and that leads to a situation where price is less than the average total cost. Then in order to curb the creation of monopoly sometimes the government may impose a tax on the monopoly product which in turn increase the cost of production. So, there is a tax. So, whenever there is a imposition of tax that increase the cost of production and in that case whatever the price they are charging that becomes less than the average total cost and that leads to the may be the possible cause or that leads to the sum of the loss in the monopoly market. Then we will come to the price and output determination in the long run. So, here if you look at the long run again it is different from the short run in term of the factors used in case of the expanding the scale of operation or may be it has a amount there is no fixed cost or there is no fixed input all the inputs are variables that is why all the costs are variable. So, in the long run monopoly firm would either a normal profit or super normal profit, but would not incur loss in the long run. Because if there if you remember the in case of competitive market when the firm incur loss in the short run still they continue with the hope that the long run they are going to incur loss in at least they can they are going to make the normal profit. But in case of monopoly generally in the long run they are not going to incur loss at all either they will get a normal profit or super normal profit. But as a strategy they prefer to take a normal profit because when it is they are earning super normal profit that that work as a incentive for the incentive for the other players to enter into the market and that is the reason if you look at all the firms they get normal profit not the super normal profit. And they would rather try to reduce the cost of production increasing the control of raw materials and that will give some amount of profit to the firm above the normal profit. Because if they are reducing the cost of production still charging that much price the gap between the price and total cost is more and that brings more profit to them. And how generally they reduce the cost of production when by increasing the control on the raw materials. Because since they are the sole producer or sole seller if the raw material the supplier is not selling the raw materials to them maybe there is no there is no market for that particular raw material. And in that way the exercise control on the supplier of the raw materials they get it in the reduced cost and that again leads to the reduced cost of production for the other firms. So, what happens when they are getting the super normal profit? Super normal profit leads to high price attract competition high price will allow to survive the new entrant and the it leads to again competition. So, whenever there is a super normal profit if they are getting super normal profit it is always the because of high price which attracts the competition and high price will allow to survive the new entrant and that will lead to competition. So, to retain the monopoly power generally the firm they charge a low price where they get only the normal profit and the low price also serve as a entry barrier for the new firm. Then we will just take a numerical to understand that how in the long run the price and output is decided and also the profit. So, here we take the total cost that is 50 plus 40 Q we will take the demand curve that is 100 minus 2 Q we need to maximize the profit and for that we will find out the d pi by d Q which in turn this is d R Q with respect to d Q minus d C Q with respect to d Q. Now, marginal revenue is equal to marginal cost. So, if you know from here because this is marginal revenue this is marginal cost if this is equal to 0 then marginal revenue is equal to marginal cost. We will find out now the marginal revenue and we will find out now the marginal cost. What is total revenue? Total revenue is 100 minus 2 Q multiplied by Q. So, that comes to 100 Q minus 2 Q square and marginal revenue is d T R with respect to Q. So, this becomes 100 minus 4 Q this is the value of the marginal revenue. Then we will find the marginal cost and how we can find out the marginal cost that is again through the taking the derivative from the total cost function with respect to the Q. So, we have total cost function that is 50 plus 40 Q and marginal cost is T T C with respect to Q. So, that becomes 40. So, we have now we will find out find out the quantity. So, marginal revenue is 100 minus 4 Q m c is equal to 40 and if you simplify this then this is 4 Q is equal to 60 and Q is equal to 15. Now, from here we can find out the value of P. How we will find out the value of P? P is equal to 100 minus 2 Q. So, that comes to 100 minus 2 15 that is 100 minus 30 that is 70. So, P is equal to 70 Q is equal to 15. Now, we will see because this is the first order condition we will see whether the second order condition gets fulfilled or not. So, second order condition is D square pi D Q square should be less than 0. So, in this case if you look at what is the second order derivative of this if you look at this is minus 4 if you solve this is we get minus 4 which is less than 0. So, second order condition also gets fulfilled and with this value of P is 70 Q is 15 we get the value of profit which is equal to 400. So, this is how generally we solve the numerical when it comes to whether short term or long run we equalize that with the we check whether both the conditions get fulfilled or not and from the first order condition we get the value of Q and P. We put the value in the Q revenue function and cost function in order to get the profit. So, we will stop here today in the next session we will discuss about the supply curve of the monopoly firm, how the measurement of the monopoly power is done, generally how the multiplant firms they function or how the price output determination is done in the multiplant firm and we will do a comparative assessment between the monopoly firm and the perfect competitive firm.


In this program, we are going to see how we can extract images from the PDF We are having some images in this PDF So let us use this as our sample document I'm going to include here Right-click copy and paste copy always So our game plan is like we're going to create instance of the image extractor class We're going to load the document We are getting the images and we are keep on iterating to reach all the images and We are just saving the current image to the file Okay, so Here Image extractor new image extractor, I'm going to give the Station keys and name Let us load document load document from file sample program 2.vdf if Let us say extractor.get first image So basically it will confirm like it is having images or not then we are Keep on going until we fetch with each end of the images and At this moment, we are just saving image extractor.save current image to file Let us name it like Let me have one variable for this also one counter result plus plus png resultfine file and image format. Let us take like image format dot png and Let us run it done. Let us see What we have in the bin folder? Here it is. So if we open the pdf we are having the three images one two and three And it generated three results one two and three


Think we just spam him really you know what we're just gonna spam shipper falls we boost so we're just gonna spam shipper falls and Pray all I will know is headless and shipper falls. That is all I will know here. This is great Let's do this. It's nothing can go wrong ever Never ever, you know, I'm not too worried about this fight. I swear. This is easy. Oh, it's done. That's great Okay, maybe I spoke too soon. Maybe this is not good I mean ideally what we could do is just trapstack. We could do that We could just trapstack him a whole bunch. Oh He keeps adding it to it. That's not good Maybe this is a little bit more harder than I thought it would be he's fingering his his friend. This is so sad Why would he do this not in public sir sir not in public? This is not okay You know what? I think this is the wrong strategy to be using. No, I ain't no quitter We got to see this through until at least I die either. He dies or I die. You know what? We're gonna restart We're gonna restart. This is a wrong strategy. We need trap stacking. I think I See no problem with this strategy now So, yeah, all done and mess faint. Holy moly pit. Thank you.  No curses upon you my friend We're back in caramel. It's curse time. I'm stunned very sad. I am unstoppable. That's what you think I will stop you. Okay. I have to hit I have to hit next round. Otherwise. I am dead Do I get a shared next I do not I need to find a We're gonna discard all of the hand all of the hand We need to find a scarecrow and also a enchant.  Please please bro. I know he did it though.  This will do a decent amount of damage on him Just kidding it won't do a decent amount of damage on him very sad.  Ah, I don't like this fight. I don't like this. This is not cool or good It also doesn't help actually doesn't really matter because my health is if it's a percentage based health Then it doesn't really matter how low my health is 7k, okay plus two weaknesses here will be preoccupied for a little bit. This better not kill me. I Died if in the chat if in the chat boys You got a scarecrow this time that is good. That is actually really good. He also goes first, which is not good That's not good at all Okay, just lost like a Thousand health already. This is great. I do this should I do this probably yes Probably yes hit next scarecrow next Pog This is man's gonna destroy me right now with a frost giant because he wants me to speed stunned Okay, that's fine. This be fine. Actually we can take one more round if they do nothing But um, I doubt that will happen So we have to hit Weakness really really buddy really Right six thousand that's pretty decent That's pretty decent. We'll take that we will take that indeed We're just gonna do three rounds of traps and hope Grim reedy can kill in that time. That is the plan. I think If not, we'll just follow up with a ship of fools or something. I Think hopefully maybe Cuz theoretically he shouldn't be on much health Once that happens. I am unstoppable. That's what you think, but you're not I will stop you I swear. Hey, yes, take off all of your shields, please and thank you.  Yes, thank you loser 10000 this can't do 10000 but it'll do a decent amount a decent amount. That's for sure crit lovely and Three traps a little bit of PS And 8000 oh Fantastic love to say it plus weaknesses lovely lovely lovely and we go for a grim reader Hopefully this does 3000. I don't think it will it'll be close. It'll be close. That's for sure. I Don't know about this one chat. No Why you do this? I Don't got this now Dylan. This is all your fault. You said I had this. This is all your fault Dylan. No No This game hates me the amount of times I've seen that spell in this world makes me want to slip on a knife honestly Makes me want to slip on a knife and cry This is why I prefer going first as well But my luck always has it that most of the time I go second, you know I wish for bosses like this you just automatically went first because it doesn't make it like It just makes it tedious You know, it's not hard. It's just tedious and I don't like it The moment you speak. Yeah, I don't think I can kill now. He's got a shield as well So, yeah, this is big. No kill at least next round. I can ship a foes. Oh So close. Oh, that would have probably nearly killed without the shield.  I Think this is dead Chat, I think this is dead. We killed it Yes, heal yourself, buddy Heal yourself, please. I've done so much damage to you. Congrats. Nice heal. So good Pro strats, dude. Pro strats. I don't think I can kill if this kills. I'll be really surprised, but it is What just a shipper foes Probably won't kill with a minus 15 You've never seen that spell before. It's celestial intervention It's in the celestial whore pack as his shipper foes. Did that kill? He's on like 200 health or something. I'm so tempted to get my mans I'm going to get my mans. He has to help me. That is not what I I got the storm one expecting he would cast tempest. Does he cast tempest? No, why would he not do this? Mr.  Hey, look, thank you for the blade. I appreciate it But I need to reshuffle now. So I would appreciate if you hit Thank you, and it's on the right dude as well. Love to see it. Thank you so much Thanks, bestie, except you have to get through a shield as well. I forgot about that But that's fine. Let's actually get through two shields plus a tower shield and also 50% resist So I don't know how well this spell is actually gonna do But hey, you know it's the thought that counts at least it'll keep him busy a little bit You know, maybe he'll focus on this man's instead of me Stop shielding him. Oh my gosh He hit which is good, which is good. This is gonna do a decent amount. It's probably like five 130 honestly honestly great honestly great. Oh my gosh, and he has for like more than 900 each round I think I have to flee because There's just no way his resist is getting way too high now Way too high if I didn't get stunned I would have killed him. So all because of that stun Like literally all because of that. Yeah 70% that's just ridiculous now. Yeah, we're fleeing. Sorry whether I apologize You were good, but not good enough This strategy works, it's just whether we can actually hit in time, you know We're not going to fortify. We're just gonna go straight for traps straight for traps We go first as well, which is even better even better As soon as we get a shad, we're hitting like no question about it We're doing big boy Grim Reader ASAP.  I swear. I Swear you get a shad Next all the round after so we're just gonna keep trapping we can go for another couple of rounds We do go first so we can kind of just gauge it a little bit nicer I don't know what's better, but we have to hit if we don't have it We're gonna have to hit with a scarecrow. We'll get some health back as well, which is good We might actually hit with a scarecrow just because we're dying Yeah, I think a scarecrow is best bet here as much as I want a Grim Reader We're gonna scarecrow we can probably crow into a Grim Reader Like instant destroy him. I mean a scion would have been good here as well because we're so low on health That would have been an option to go for That did not as much as it did last time. We're gonna get the fire one actually stormy. I didn't do much for us last time Instant Krampus love to say it Love to say it. I am justified Okay, we do two more traps and then we Grim Reader Why you do this? Why? Why? Hello, please no stop Stop the heels We need a recount of this health. This is not okay He's hitting the right guy. Oh my gosh. We have to hit this is gonna be so good So good Just watching this is making me want to smash my keyboard fair enough I hope it's not because of how I'm playing and it's just simply the Absolutely completely unlucky this that I have at the moment 5k okay, it was kind of trash kind of trash not gonna lie the keyboard would have been out the window Yeah, I'm I'm getting really unlucky. I feel Really unlucky and it's not cool or good You know what if they could stop using the spell. I wouldn't be mad Honestly would not be mad if they could just stop using the spell like just a suggestion Just a suggestion make a cry time. I mean I can't kill them. I Hate him. Honestly, I feel like fleeing because I'm not first not gonna lie. I also shield right off the bat. I'm gonna play I'm playing not even trying this not trying this I'm being really strict about this now This has as the kids say tilted me Quibern hook me up with your sweetest and fell fair enough and fell train What's the other one Flawless because I am absolutely flawless. You know what they say they call me flawless Flawless Brent, that's for sure. So basically flawless 15% pierce kind of handy. I have what 15 ish percent pierce 17 pierce So 15 plus 17 is a number which means it's bigger than before thus meaning it is good We go first. We don't get stunned. We wouldn't is playing 35. Thank you chat Thank you chat. We go first paw Basically, we have until 30% brace and no shields until we need to run away again. I Love how they change the spell, but it still takes five million years to cast Bye Like I said, I'm being strict. I Swear I will stop you. No stop shielding him What the heck because I could easily just kill the minion and then run, but then I don't like doing that I'll try this later thinking healing with sacrifice also goes pierce pierce blade while trapping and strike shadow crow Yeah, I mean the problem with pierce blade is that he When he does his whole leaf storm thing he infebles you So, you know, you won't have any of the pierce blades We're gonna and foul then hit or flawless and then that's the plan here flawless and hit this So yeah, it's a great strategy, but also there is some downfall to that as well Because you will not keep your pierce blade. My biggest issues. I don't get sheds enough to justify a strike at this stage So instead I flawless. It's not as good, but I do it anyway I mean for the early parts of this fight. It's not terrible. It's fine There's 20 unlucky one around to shoot too late. Oh, well, that's okay. That's okay. It's fine Right here this I guess right how much does this do? Yeah, headless. Thank you for coming in clutch. What we do is next round We scarecrow get some health back and boom bam. We're in business, baby I kind of wanted to this Like not gonna lie. I might die But also at the same time imagine if I don't die I Think if we can get a I mean honestly if we can grim reader in a couple rounds, we should be fine With the boss man's boss man's will be down, which is good Actually will trap will faint flawless Yeah faint flawless Grim, I don't know if a grim reader can kill Okay, we're getting into the point where we have Exhausted our peers so he's over our peers now, which is not great We're gonna do this hope this kills if this doesn't kill gonna be really sad really really sad This is like our last kind of chance to do it We could wait two rounds and ship of holes and that's really our last time to do it But I hope that this can kill. I really hope this can kill.  I am crying inside right now 2000 damage with 140% and a 25 we should be good.  You're the best spell that has ever been into my spell deck. Yes. I did it I did it Chat look at me go Look at me go chat Now we get to the easy bit Now we get to the easy bit shield spam McGee all we need do is save up for a faint and not a faint Reshuffle just trap them with everything we got and GG and hopefully by then he's taken off half of the shields Through healing see told you.  I don't need them Yeah, that's right get wrecked if I die now that would be so embarrassing, but I don't think I will I believe in me I'm just gonna spirit trap twice just to say that I do it then I'll reshuffle. It's fine We might pip conserve a little bit as well. Probably not Okay, we could conserve Pog We want to drain over time imagine imagine that would be so good. That would be so cool Oh my gosh, take off some of these shields, please one two Three it's not too bad That ain't too bad Yes, take off your shields. Take them off, please be my guest be my guest sir Okay, nice another 15% off lovely Yeah, they should do a decent amount I think this is it chat I think this is it. We did it after an hour and ten minutes. We have finally defeated one boss One boss Feels like I'm going for one in the million, but I know that it's not gonna do anywhere near that Yeah, Lamaria yay sidequests love to say it right GG easy clap


Welcome to George H. Smith's Excursions into Libertarian Thought, a production of Libertarianism.org and the Cato Institute. Self-Interest and Social Order in Classical Liberalism. Bernard Mandeville. Bernard Mandeville, 1670-1733. A Dutch physician who settled in London shortly after earning his degree in medicine at the University of Leiden is best known as the author of The Fable of the Bees or Private Vice's Public Benefits, a work that provoked enormous controversy throughout the 18th century. Mandeville developed a number of important themes, most notably the role of self-interest, so-called vices, in generating a prosperous social order that would play a crucial role in later libertarian thought. It was largely through the writings of F. A. Hayek who praised Mandeville as an anti-rationalist and a pioneer in spontaneous order theory that various libertarian thinkers, especially economists, became interested in him. Mandeville had good reason to characterize The Fable of the Bees as a rhapsody void of order or method. Written over a period of 24 years, it began as a dog-roll poem, The Grumbling Hive, or Naves Turned Honest. In later years, beginning in 1714, Mandeville appended a number of essays, remarks, and dialogues to subsequent editions until what began as a poem of 433 lines came to fill two substantial volumes. This later material, which includes the important theoretical essays, an inquiry into the origin of moral virtue, and a search into the nature of society, as well as six dialogues that comprise the second volume, are extended commentaries on themes presented in The Grumbling Hive. Mandeville's allegory of a beehive extols the social benefits of self-interested actions, such as avarice, greed, and other traditional vices, but it is not always clear what Mandeville meant in claiming that private vices produce public benefits. He depicted the Hive as a limited monarchy in which the king's power was circumscribed by laws, and in the moral of the poem, Mandeville stated, So vice is beneficial found when it's by justice lopped and bound. This suggests that Mandeville regarded as socially beneficial only those vices that do not violate the rules of justice. This is the interpretation given by FBK in the introduction to his superb edition of The Fable of the Bees. Vices are to be punished as soon as they grow into crimes, says Mandeville. The real thesis of the book is not that all evil is a public benefit, but that a certain useful proportion of it, called vice, is such a benefit and is on that account not really felt to be evil, though still called vicious. This is a problematic interpretation because Mandeville also discussed the social benefits of unjust actions, such as theft and fraud, which provide employment for those in the criminal justice system, as well as for those artisans and laborers who are needed to replace goods that have been destroyed or stolen. This ambiguity in Mandeville's poem, which appears in his explanatory essays as well, partially accounts for the hostile reception he later received even from those who sympathized with his defensive self-interest. For example, in the theory of moral sentiments, Adam Smith said that Mandeville's arguments in some respects bordered upon the truth, despite how destructive this system may appear. Although Kaye and other commentators have depicted Mandeville as an early proponent of laissez-faire, he is more accurately described as a liberal mercantilist. Primarily because he argued that government should ensure a favorable balance of trade and that the lower classes should not be educated above their station, lest they become discontented with menial labor and low wages. He also maintained that private vices can be turned into public benefits only by the dexterous management of a skillful politician. Nevertheless, it is fair to say that Mandeville was sympathetic to some aspects of laissez-faire. One of Mandeville's most influential arguments was his defense of luxury, which had been widely condemned for its supposedly corrupting effects on social moors. Mandeville's points about the economic benefits of luxury, as well as his criticism of this concept as excessively vague, would later reappear in the writings of David Hume, Edward Gibbon, Adam Smith, and other liberal individualists. More troublesome was Mandeville's defense of psychological egoism, according to which all actions, even those virtuous actions which appear other regarding or disinterested, are ultimately motivated by self-interest. It was largely owing to this thesis that Mandeville, like Thomas Hobbes before him, was widely condemned as an enemy of morality. Mandeville responded to this common charge by claiming that he was observing human behavior as it really is, not prescribing how it ought to be. Before proceeding with a more detailed account of Mandeville's ideas, I wish to call attention to a serious problem, namely the conflict between psychological egoism and a theory of spontaneous order rooted in the beneficial effects of self-interested actions within the boundaries of justice. If psychological egoism is correct, if all actions are ultimately motivated by self-interest, then to argue for the benefits of self-interested actions in developing and maintaining social order tells us virtually nothing. For if all actions are self-interested, if non-egoistic actions are impossible, then we have no point of contrast by which we can distinguish some kinds of motives from others. And in this case, any action may be said to promote social order. Even social planners would be acting from self-interest, according to psychological egoism. So even their actions could be praised as conductive to social order. Only in a thinker like Adam Smith, who distinguished self-interest from beneficence, does the appeal to an invisible hand make sense? For only if we contrast self-interested actions with other kinds of actions, is it possible to isolate the former and explore the social benefits of self-interest in contrast to other kinds of motives? For a psychological egoist like Mandeville, however, no such contrast is possible, so it becomes meaningless to praise self-interested actions for their social benefits since this would entail nothing more than praising all human actions without distinction for their social benefits. Adam Ferguson and other critics of psychological egoism were therefore correct. If, through a linguistic coup, we collapse all kinds of actions into the category of self-interest, then we will need to invent a new and needless vocabulary that enables us to distinguish between different types of motives within the generic category of self-interested actions. Only in this way would we be able to explain and defend the traditional theory of spontaneous order. Despite this fatal flaw in Mandeville's approach, he had many worthwhile and provocative things to say, especially about conventional notions of vice, and these ideas may be abstracted from his fundamental principles and evaluated on their own merits. Now let's take a brief look at the historical context in which Mandeville offered his ideas about the beneficial effects of vice. When Mandeville moved to England during the 1690s, while he was in his 20s, he encountered a widespread movement to suppress personal vices. The glorious revolution of 1688 was widely viewed by pious Christians as not only a revolution for the rights of Englishmen, but also as a revolution against moral corruption. The Stuart Kings, it was said, had tolerated an even encouraged immorality, drunkenness, whoring, etc., among their subjects as a means of maintaining political control. Only a virtuous citizenry will resist tyranny. On 4 April 1699, the Archbishop of Canterbury issued a circular letter in which he called for the suppression of vice and encouraged pious Christians to report offenders to magistrates. Every pious person of the laity should, if need be, be put in mind that he ought to think himself obliged to use his best endeavors to have such offenders punished by the civil magistrates, as can be no otherwise amended, and that when he hears his neighbor swear or blaspheme the name of God or sees him offend in drunkenness or profanation of the Lord's day, he ought to give the magistrate notice of it. In such a case, to be called an informer, will be so far from making any man odious in the judgment of sober persons that it will tend to his honor when he makes it appear by his unblameable behavior and that care he takes of himself and his family, that he doth it purely for the glory of God and the good of his brethren. Such well-disposed persons as are resolved upon this should be encouraged to meet as often as they can to consult how they may most discreetly and effectually manage it in the place where they live. On 20 February 1702, Queen Anne, just one month after ascending the throne, issued a proclamation for the encouragement of piety and virtue and for the preventing and punishing of profaneness and immorality. The Queen complained that the laws against vice were not being adequately enforced and she wanted that changed. It is an indispensable duty on us to be careful above all other things to preserve and advance the honor and service of Almighty God and to discourage and suppress all vice, profaneness, debauchery and immorality which are so highly displeasing to God, so great a reproach to our religion and government and by means of the frequent ill examples of the practicers thereof have so fatal a tendency to the corruption of many of our loving subjects otherwise religiously and virtuously disposed and which if not timely remedied may justly draw down the divine vengeance upon us and our kingdoms. To the intent therefore that religion, piety and good manners i.e. morals may according to our most hearty desire flourish and increase under our administration and government we have thought fit by the advice of our privy council to issue this our royal proclamation and do hereby declare our royal purpose and resolution to discountenance and punish all manner of vice, profaneness and immorality in all persons of whatever degree or quality within this our realm. Here we see one of the most common early arguments for vice laws since God as illustrated in the Bible especially the Old Testament inflicts collective vengeance punishing the many for the sins of the few rulers must suppress and punish supposedly private vices as a means of protecting society as a whole from the divine wrath of plagues, famines, military defeats and so forth incidentally this was one reason why enlightenment libertarians stressed the importance of science which teaches that such disasters result from natural causes individual freedom these early libertarians believed cannot gain a solid foothold in a world where the innocent are punished along with a guilty since there exists no room in this scheme for the argument that private vices harm only the individuals who practice them a secular version of this argument has survived to this day among defenders of vice laws but I must leave this interesting controversy for a later series in 1701 England had around 20 societies for the reformation of manners in that day manners meant what we now call morality or morals these societies relied heavily on informers to hunt down sinners as Thomas A. Horne explained in the social thought of Bernard Mandeville virtue and commerce in early 18th century England the English legal system in this period relied upon information given by private individuals and this procedure made it possible for a group like the societies for the reformation of manners to become actively involved in law enforcement according to a student of this period a private person could obtain a warrant from a justice of the peace or magistrate sometimes on his unsupported evidence and this warrant of conviction the constable of the parish was required to execute after the convicted persons paid a fine or served a term in jail they could sue for false charges but if they lost they had to pay treble costs the societies with the help of friendly magistrates distributed blank warrants to its members who filled in the names of the wrongdoers and collected the filled in warrants to return them to the magistrates it appears that the members of the society were rarely informers themselves but employed others to inform for a fee the practice of informing was no more popular then than it is now and the informers soon became the symbols of the societies to their enemies given the moral fanaticism that prevailed when Mandeville took up residence in London we can appreciate why his argument that private vices may produce unintended public benefits evoked furious denunciations not only against Mandeville's ideas but also against him personally the fable of the bees according to Kay made a public scandal and it would be difficult to overrate the intensity and extent of Mandeville's 18th century fame in my next essay I shall take a closer look at some of the ideas that made Mandeville so notorious thank you for listening to excursions to learn more about libertarian philosophy and history visit www.libertarianism.org