Final answer:
In manufacturing, technology encompasses all methods that combine inputs to produce outputs effectively, such as automation and improved organizational techniques.
Step-by-step explanation:
Technology in the context of manufacturing refers to various methods and innovations that combine inputs such as labor and physical capital to produce desired outputs effectively and efficiently. The goal of a firm is to identify and implement production technology that minimizes costs, thereby maximizing profits. If companies do not adopt these lower-cost production technologies, they risk losing business to competitors who can produce and sell at lower prices.
Within manufacturing, technology can manifest as new organizational methods, like the assembly line, improvements in output quality, and novel institutions that streamline the production process. The choice of production technology is essential as it determines the cost of outputs and a firm's competitiveness. Whether it is substituting labor with physical capital through automation, such as robots, or investing in one large machine instead of multiple smaller ones, technology is a powerful tool that significantly impacts manufacturing.