Question

To generate higher profits, producers must work to

Answer 1

Answer: The answer is D. ( Decrease their production costs.)

Explanation: Profit Margin is a measure of the profitability of the company. It is computed as the net profit as a percentage of the sales. The higher profit margin results from an increase in sales revenue or a decrease in production cost.

The increase in total supply does not result in the revenue of the company. It only means more products are available to the customers. So, it will not result in higher profit margins.

The increase in total expense and decrease in the customer base will reduce the net profit, thereby reducing the profit margin.

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