economics- what is the law called where cost of input increases so cost of output must increase (in order to keep max profit)

The law you are referring to is called the law of supply. According to this economic principle, when the cost of inputs, such as labor, raw materials, or technology, increases, the cost of producing goods or services increases as well. As a result, producers need to adjust their prices upward in order to maintain or maximize their profit margins.

To understand more about the law of supply, you can follow these steps to get a deeper insight:

1. Start by understanding the basic concept of supply and demand: The relationship between supply and demand is at the core of economics. It states that when the demand for a product increases, the price tends to increase as well, provided that supply remains constant. Conversely, when demand decreases, prices tend to fall.

2. Explore the concept of supply elasticity: The degree to which the supply of a product can respond to changes in its price is known as supply elasticity. When the cost of inputs rises, the supply of a product becomes less elastic—meaning producers might struggle to increase output without experiencing higher costs. This reduces their ability to respond to changes in demand by lowering prices.

3. Consider the impact of cost-push inflation: With cost-push inflation, higher costs of production can lead to upward pressure on prices throughout the economy. Rising input costs can force firms to increase their prices to maintain profitability, potentially leading to a broader increase in the overall price level.

By understanding the law of supply and its implications, you can gain insights into how changes in input costs affect the cost of output, and indirectly influence prices and profitability in the marketplace.