To generate higher profits, producers must work to:

• A. increase efficiency in the use of factors of production
• B. raise production costs unnecessarily
• C. ignore consumer preferences
• D. decrease the quality of their products

Answer: (A)

Verified step by step guidance

1. Understand the concept of profit maximization in microeconomics, which involves increasing the difference between total revenue and total costs.
2. Recognize that increasing efficiency in the use of factors of production means producing more output with the same or fewer inputs, thereby reducing costs and increasing profits.
3. Analyze why raising production costs unnecessarily would reduce profits, as higher costs without corresponding revenue increases lower profit margins.
4. Consider why ignoring consumer preferences is detrimental, since consumer demand drives sales and revenue; ignoring preferences can reduce demand and profits.
5. Evaluate why decreasing product quality can harm profits by reducing consumer satisfaction and demand, leading to lower sales and revenue.