The short-run economic outcome resulting from the increase in production costs is known as _____.

question:- The short-run economic outcome resulting from the increase in production costs is known as _____.

Answer: The correct answer is cost-push inflation.

Cost-push inflation is inflation that is acute and constantly changing based on the rate of the general price level of commodities in the economy through the price of production. If the value of factors of production such as raw materials human resources or energy rises, it is obvious that the producer may decide to increase the price of factors of production through the prices of products. Due to the occurrence of expensive production costs, the available quantity of goods and services in the market is reduced and it is well known as supply-side inflation. Where cost-push inflation, arises from an increase in the cost of production through factors such as higher pay for employees, costly imported raw materials or new taxes, and regulations. It is a short-run cost because other factors in the market and changes may offset any rise in cost in the long run.