What do higher input prices result in?

Input costs can include materials, labor, fees, and other expenses. Output is the finished product. MC stands for marginal costs. If a company is spending more on their input costs, such as salaries or new machinery, there will be a decrease in the output profits.

Marginal cost, that is the cost of making one item, will increase as well. Many factors play into this equation and it can fluctuate due to these varying costs. If input costs are increasing, the marginal costs are directly tied to it so it would naturally increase.