The correct answer is C. Entrepreneurship
Step-by-step explanation:
In production, entrepreneurship refers is the term used to describe the individuals that lead and manage a business. This involves integrating other factors such as labor (workers), land (natural resources), and capital (tools and technology) to produce goods and earn profit. Additionally, this factor involves innovation because only through innovation the production can be more effective.
This is the factor described in the passage because it is mentioned "the government attempts to encourage more innovation" and innovation is part of entrepreneurship. Also, the passage mentions businesses need to develop new ideas, which is part of using other factors of production effectively to increase profit and support the national economy.