What does cost-push inflation primarily result from?

Cost-push inflation occurs when the overall price levels rise due to increases in the cost of production. This can happen when businesses face higher expenses for inputs such as raw materials, labor, or energy. These increased production costs lead companies to raise the prices of their goods and services to maintain profit margins, which ultimately results in higher prices for consumers across the economy.

When production costs rise—whether due to external factors like increased commodity prices or internal factors such as wage increases—companies typically respond by passing these costs onto consumers. This mechanism illustrates the direct link between rising production costs and inflation, marking it as a key characteristic of cost-push inflation.

In contrast, options such as increases in consumer saving rates and increases in the availability of goods and services are generally associated with demand-side factors, not cost-push inflation. Additionally, while reduced governmental regulation of prices could influence market behaviors, it does not directly account for the rising costs of production that lead to cost-push inflation.