Question

What effect do rising input costs have on the price of a good.

a. The good becomes dependent on government regulation.
b. The good becomes cheaper to produce.
c. The good becomes more expensive to produce.
d. It has no effect on the cost of the good.

Answer 1

Step-by-step explanation:

Inputs are the factors required for production to take place. They may include labor and raw materials. In economics, inputs are the four factors of production that include land, labor, entrepreneurship, and capital.

The final cost of a product is dependent on the costs of production. The cost of production is an aggregation of the cost of each input used in the production. For a company to stay in operation, it must meet all its production costs. These costs are spread to each unit produced. A high production cost will result in an expensive product. Should the cost of any of the input increase, then the overall cost of the products will rise.