Final answer:
Choosing between different production options involves a trade-off between efficiency and variety. Each production method, be it mass, custom, batch, or continuous production, suits different needs depending on cost considerations and the product's requirement for variety or standardization.
Step-by-step explanation:
When considering production options for a variety of unique products, each option incurs different costs and offers different levels of efficiency and variety. Mass production is highly efficient for producing large volumes of a single product, but it is not suited for variety. Custom manufacturing excels in providing a high degree of customization and variety but tends to be less efficient and more costly per unit. Batch production strikes a balance, allowing for the production of a series of different products in separate batches. Lastly, continuous production runs indefinitely and is the most efficient for standard products requiring little variation.
The choice between efficiency or variety is context-dependent. For example, if labor costs rise, a firm might shift from a labor-intensive production technology to one relying more on machinery, as indicated by Production technology 1 requiring '10 workers and 2 machines', whereas Production Technology 3, which uses more machinery, becomes more appealing.
Understanding the cost implications for different types of goods, such as cars versus computer software, is crucial in determining the optimal production method. The right balance of variety and efficiency must be weighed against consumer demand and cost considerations.