Awarding $500 under §2-708(1) awards too much. If I had acted reasonably, I would have limited my losses to $300 by not manufacturing.
Since §2-708(1) is inadequate, I recover under §2-708(2), which awards me my lost profit of $300. In this way, the UCC provides an incentive for me to be reasonable by not awarding me expenses I unreasonably incur.