What is cost push inflation?

Cost push inflation is the result of an increase in the price of the factors of production e.g. labour, raw materials. For example, an increase in the price of oil will increase the price of most raw materials. Firms will have to increase their prices to sustain the same level of profits. This increase in price across the economy is cost push inflation.

NO
Answered by Nick O. Economics tutor

4950 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How does an increase in the interest rate affect the level of investment?


Why might a perfectly competitive firm make abnormal profit in the short run but only normal profit in the long run?


What is market failure?


What are tariffs?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences