LSUS MBA 701 EXAM 7 HIGH-YIELD PRICING
STRATEGY, GAME THEORY, AND FIRM
BEHAVIOR SUMMARY 2026
◉ identify goals and constraints, recognize the nature and
importance of profits, understand incentives, understand markets,
recognize the time value of money, use marginal analysis and make
data driven decisions.
Answer: the 7 principles of effective managerial decision making
◉ to maximize profits.
Answer: what should a firms overall goal be?
◉ available technology and prices of inputs used in production.
Answer: what are examples of some constraints?
◉ accounting profit.
Answer: total amount of money from sales (revenue) minus the
dollar cost of producing the goods or services
◉ economic profit.
, Answer: the difference between total revenue and total opportunity
cost
◉ opportunity cost.
Answer: the explicit cost of a resource plus the implicit cost of giving
up its best alternative
◉ they signal to resource holders where resources are most highly
valued by society.
Answer: what is the role of profits
◉ an incentive to alter their use of resources.
Answer: what to changes in profits provide to resource holders?
◉ how resources are used and how hard workers work.
Answer: what do incentives impact within a firm?
◉ buyer and seller.
Answer: two sides to every market transaction
◉ consumer-producer rivalry, consumer-consumer rivalry and
producer-producer rivalry.
STRATEGY, GAME THEORY, AND FIRM
BEHAVIOR SUMMARY 2026
◉ identify goals and constraints, recognize the nature and
importance of profits, understand incentives, understand markets,
recognize the time value of money, use marginal analysis and make
data driven decisions.
Answer: the 7 principles of effective managerial decision making
◉ to maximize profits.
Answer: what should a firms overall goal be?
◉ available technology and prices of inputs used in production.
Answer: what are examples of some constraints?
◉ accounting profit.
Answer: total amount of money from sales (revenue) minus the
dollar cost of producing the goods or services
◉ economic profit.
, Answer: the difference between total revenue and total opportunity
cost
◉ opportunity cost.
Answer: the explicit cost of a resource plus the implicit cost of giving
up its best alternative
◉ they signal to resource holders where resources are most highly
valued by society.
Answer: what is the role of profits
◉ an incentive to alter their use of resources.
Answer: what to changes in profits provide to resource holders?
◉ how resources are used and how hard workers work.
Answer: what do incentives impact within a firm?
◉ buyer and seller.
Answer: two sides to every market transaction
◉ consumer-producer rivalry, consumer-consumer rivalry and
producer-producer rivalry.
