Step 1: Write the Nernst equation for this cell.
\[ E_{cell} = E^\circ_{cell} - \frac{0.0591}{2}\log\frac{[Mg^{2+}]}{[Cu^{2+}]} \] since two electrons are exchanged in $Mg + Cu^{2+} \rightarrow Mg^{2+} + Cu$.
Step 2: See what needs to happen to the log term to raise $E_{cell}$.
Because that log term is being subtracted, $E_{cell}$ goes up only when $\log\frac{[Mg^{2+}]}{[Cu^{2+}]}$ becomes smaller, which means the ratio $[Mg^{2+}]/[Cu^{2+}]$ itself must shrink.
Step 3: Check which change achieves that.
Dropping $[Mg^{2+}]$ to $0.1\,M$ while keeping $[Cu^{2+}]$ at $1.0\,M$ makes the ratio ten times smaller, giving \[ E = E^\circ - \frac{0.0591}{2}\log(0.1) = E^\circ + 0.0295\,V \] which is a genuine increase. Dropping $[Cu^{2+}]$ instead would make the ratio bigger and actually lower $E_{cell}$.
Step 4: State the answer.
Reducing the anode's own product concentration pulls the reaction further to the right and raises the cell's voltage. \[ \boxed{\text{Decrease } [Mg^{2+}] \text{ to } 0.1\,M} \]