Increases in the Prices of Raw Materials Can Create Cost-Push

question 47

True/False

Increases in the prices of raw materials can create cost-push inflation.

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Definitions:

Total Cost Curve

A graphical representation showing the total cost incurred by a firm in the production of goods or services at different levels of output.

Quantity

The volume of a physical or non-physical item or service.

Economies Of Scale

Economies of scale are cost advantages reaped by companies when production becomes efficient, leading to a reduction in the per-unit cost as the scale of operations increases.

Fixed Cost

A cost that does not change with an increase or decrease in the number of goods or services produced or sold.