Final answer:
The two factors to consider when selecting your production method are quantity and customization. Quantity will influence whether you lean towards standardized or customized production, while customization is linked to the specific needs of the market or the product. Production methods and costs are also shaped by changes in technology costs, dictating a shift between labor and capital.
Step-by-step explanation:
When selecting a production method, two important factors to consider are quantity and customization. The decision revolves around the scale of production and how personalized the products need to be. High volume production typically benefits from standardized processes, which can reduce costs. On the other hand, if customization is a priority, methods that allow for individual tailoring might entail higher costs but can command premium prices.
Moreover, the selection of a production method is influenced by the type of technology and equipment available. Should the cost of machines increase, one could anticipate a shift towards a production method that relies more on labor than capital to manage costs effectively. This aligns with the consideration that the firm should choose the production technology with the lowest total cost, which would also be dynamic in response to changes in relative costs, as indicated by the increased cost of machines.