Where an entity faces resource constraints, the appropriate selection of what to produce should be based on the contribution per unit of resource constraint, as this will optimise output and profits.

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When facing resource constraints, it is important to allocate resources to the most profitable activities. By selecting what to produce based on the contribution per unit of resource constraint, the entity ensures that it is maximizing output and profits with the limited resources available.

Where an Entity Faces Resource Constraints, the Appropriate Selection of What