The ABC Company executives decide that they will begin to produce more gidgets than gadgets. They previously had been producing 500,000 gadgets per year and only 300,000 gidgets. Yet they noticed that at the end of the year, there were still 100,000 gadgets left on the shelves and no gidgets. a. In an answer of at least one paragraph, explain why the company would want to produce more gidgets based on this market data. b. In an answer of at least one paragraph, explain why the ABC Company's decision involves a trade-off and identify what the trade-off is

Question

The ABC Company executives decide that they will begin to produce more gidgets than gadgets. They previously had been producing 500,000 gadgets per year and only 300,000 gidgets. Yet they noticed that at the end of the year, there were still 100,000 gadgets left on the shelves and no gidgets. a. In an answer of at least one paragraph, explain why the company would want to produce more gidgets based on this market data.  b. In an answer of at least one paragraph, explain why the ABC Company's decision involves a trade-off and identify what the trade-off is

anonymous · Answer

I need help

anonymous · Answer

Ill give you a quick answer for both. You can tell me what you can expand on. 

The demand for gidgets was greater than the company could supply, whereas the case was the opposite for gadgets, thus to optimize profit (i.e. move towards equilibrium) they must increase gidgets and decrease gadgets. 

The tradeoff is between gidgets and gadgets. Same resources difference allocation.