(i) Demand/ market for the goods/ services-A firm will prefer to produce those goods/ services whose demand/ market is high in order to realize high/ maximum profits.
(ii) Cost of production/ expense to be incurred: A firm will produce those goods/ services for which there are less expensive/ low costs of production.
(iii) The government policy/ taxes imposed subsidies given-produce goods/ services that attract favourable government policies.
(iv) Level of competition-A firm may prefer to produce those goods that meet the least competition.
(v) Expected profits to be realized: A firm will prefer to produce those goods/ services that would yield maximum/ high profits.
(vi) Availability of resources/ raw materials so that firms can be able to produce the goods/ service at a comparative cheaper rates.
maurice.mutuku answered the question on July 27, 2017 at 05:29
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