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What is Cost Push Inflation
Cost Push Inflation : When a cost of production (e.g. wages) enhances and firms put up prices to maintain profits. Cost increases may occur because wages have gone up or because raw material prices have enhanced. It is important not to muddle cost-push with demand-pull inflation. Cost-push inflation occurs when costs have risen independently of demand.
Within analysis of perfect competition, we distinguish between the short run and the long run on the basis that use of some input factors is fixed in the short run, but variable in
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