Explain whether a monopoly that maximizes profit will also be ...

[geodog55]

Explain whether a monopoly that maximizes profit will also be maximizing revenue and production.
 
  What will be an ideal response?

Question 2

Prisoner's dilemma games imply that cooperative behavior between two people or two firms always breaks down. But reality teaches us that people and firms often cooperate successfully to achieve their goals.
 
  Why do the results from prisoner's dilemma games fail to predict real-world results?
  A) Prisoner's dilemma games do not permit people or firms from reneging on agreements, which often occurs in real-word situations.
  B) Most real-world situations involve more than two people or firms; the prisoner's dilemma is only applicable to situations that involve two parties.
  C) The prisoner's dilemma does not apply to most business situations that are repeated over and over.
  D) Prisoner's dilemma games predict the behavior of people and firms that engage in illegal activity; most people and firms do not resort to illegal activity.

[IAPPLET]

Answer to Question 1

Profit maximization is not the same thing as revenue maximization. To maximize revenue the firm would produce up to the point where marginal revenue is zero. Unless marginal cost is zero, this is a larger quantity than the quantity where marginal revenue equals marginal cost. Maximizing production could mean producing the physical maximum possible. This is likely to be far beyond the profit-maximizing level of output.

Answer to Question 2

C