Which is one of the main factors driving prices for goods and services upward? Wages drop so that workers have to spend a higher percentage of income on the cost of necessities. People demand more services from the government so that there's a budget deficit. Unemployment increases competition among workers so that wages are pushed upwards. Production costs increase so that producers need to charge more to make a profit.

The answer in this case would be the last option mentioned in the answer list or options which is Production costs increase so that producers need to charge more to make a profit.

Explanation:

Production cost or the overall cost of production is one of the major factors affecting the price of the final goods and services in the market. In this case, an increase in the production costs inherently indicates increase in either the variable cost of production or fixed cost of production or both as these are the constituents or determinants of the total or overall cost of production for any firm or company. Variable costs of production relates to the costs or expenses of the variable factors/inputs of production used in the production process and fixed cost refers to the fixed or constant costs or expenses pertaining to fixed resources used in business operation. Now, an increase in production costs and expenses reasonably entails a reduction in the total or overall profit level of any firm or company, everything else held constant. Hence, as a compensation for the loss in the overall profit level, the increase in production costs and expenses can be transferred or converted to an increase or upward hike in the prices of goods and services.