Final answer:
A company faced with constrained resources should prioritize the product with the highest opportunity cost, focusing on maximizing efficiency and profit. Strategies like economies of scale and substitution of inputs also play significant roles in such decisions.
Step-by-step explanation:
When resources are constrained and products use different inputs, a company should focus on producing the product with the highest opportunity cost. This concept is decided on the basis of input costs and the potential profits from different products. Companies should aim to maximize efficiency and produce goods that will yield the highest return relative to the cost of the inputs used. For instance, if a product requires less of an expensive input but yields a higher profit, it would be the more sensible choice over a product with lower profit margins that consumes more costly resources.
Additionally, companies may employ strategies that involve economies of scale, where increasing production leads to a lower cost per unit. The decision on what to produce also depends on the firm's production technology and the ability to substitute relatively inexpensive inputs for more expensive ones, in order to possess the most cost-effective production process in the long run.