How would a manufacturer benefit by using fewer scarce resources?

• A. By decreasing the efficiency of production
• B. By increasing the scarcity of resources in the market
• C. By reducing production costs and increasing profitability
• D. By lowering the quality of the final product

Answer: (C)

Verified step by step guidance

1. Understand the concept of scarce resources: Scarce resources are limited inputs used in production, such as raw materials, labor, or capital, which are not available in unlimited quantities.
2. Recognize that using fewer scarce resources means the manufacturer is optimizing resource use, which typically leads to lower input costs.
3. Analyze how reducing the use of scarce resources can decrease production costs because the firm spends less on expensive or limited inputs.
4. Consider that lower production costs can increase profitability, as the firm either maintains prices or can reduce prices to be more competitive while keeping margins.
5. Conclude that the benefit to the manufacturer from using fewer scarce resources is primarily through cost reduction and improved profitability, rather than decreasing efficiency, increasing scarcity, or lowering product quality.