Answers:
a) It would be inefficient for a manufacturer to produce music CDs instead of MP3 music files nowadays. This is because technology has advanced to a point that has made other types of older technology obsolete. If people want to hear music, they will go for the newer technologies due to convenience and status. Therefore, it is unlikely that CDs would be a lucrative business.
b) Scarcity plays a role in his decision because of the scarcity of resources. The manufacturer is likely to have scarce resources (limited resources, most likely less than he would desire). Because of this, the manufacturer has to decide what the best way to allocate these resources is. It is likely that the best financial decision for him is to manufacture MP3 files as oppossed to CDs.