Correct Answer: Wages and input costs increase

Solution : The correct answer is (c) Wages and input costs increase

Cost-push inflation is driven by an increase in the production costs faced by businesses, which can be caused by various factors. When wages rise or the costs of raw materials, energy, or other inputs used in production increase, businesses face higher costs of production. In order to maintain their profit margins, businesses may pass on these increased costs to consumers by raising prices, leading to inflation.

An increase in wages can result from factors such as labor market dynamics, changes in minimum wage laws, or bargaining power of labor unions. Similarly, increases in input costs can be influenced by factors like changes in commodity prices, taxes, regulations, or supply chain disruptions.