In the context of factors of production, what would tortilla manufacturers have needed to do in order to make the same profit if the price of flour increased?

• A. Decrease the number of workers employed
• B. Reduce other production costs or increase the price of tortillas
• C. Increase the quantity of flour used in production
• D. Lower the quality of tortillas produced

Answer: (B)

Verified step by step guidance

1. Understand that an increase in the price of flour, a key input (factor of production), raises the production cost for tortilla manufacturers.
2. Recognize that to maintain the same profit level, manufacturers must either increase revenue or reduce other costs to offset the higher flour cost.
3. Consider that increasing the quantity of flour used or lowering the quality of tortillas would not effectively maintain profit, as these either increase costs further or reduce product value.
4. Identify that reducing other production costs means finding savings in labor, energy, or other inputs, which lowers total costs and helps preserve profit margins.
5. Alternatively, increasing the price of tortillas raises revenue per unit sold, compensating for the higher flour cost and maintaining the same profit.