Final answer:
The criterion of the iron triangle that evaluates if a product will be more profitable than its cost is the financial return or rate of return. The Gizmo Company must consider this, along with a 5% social benefit for society from their investments. Comparative advantage and factors such as production costs, technology, and resources also play a role in trade share relative to GDP.
Step-by-step explanation:
The success criterion of the iron triangle that considers whether a product will bring a greater return than it costs is known as the financial return or rate of return.
For a company like the Gizmo Company planning to develop new household gadgets, analyzing the expected rates of return from sales is crucial. Every investment that achieves a target rate of return for the company also generates a social benefit, which is an additional return for society.
For instance, if an investment has a 6% return for the Gizmo Company, it would yield an 11% return for society, indicating both monetary success for the entrepreneur and benefits for the market with potentially higher-quality products and competitive prices.
When evaluating the economic impact of a company's products, the concept of comparative advantage should also be taken into consideration. This occurs when one state can produce a good or service in a more cost-effective manner than another state, influencing trade patterns and the share of trade relative to a nation's GDP.
Three key factors that can affect this share include production costs, available technology, and access to natural resources.