Question

What does the decision of how much to produce depend upon?

Answer 1

The decision of the price of a good depends on its demand. You can not just produce a certain product without knowing the amount of demand in the market. The demand will depend on the buyer's willingness to pay for the goods. 

If you produce and produce products then it might bankrupt you because the price will be low because of the higher supply and no one is buying your product.