Whenever an input makes up a large percentage of a good's final cost, an increase in that input's price will

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When an input makes up a large percentage of a good's final cost, an increase in its price will have a significant impact on the total cost of production. As a result, the increase in cost will affect total cost relatively more. This may lead to a decrease in profit margins, even if the revenue remains stable. However, it is unlikely to affect total revenues or cause the firm to shutdown, unless the increase in input price is substantial and long-term.

Whenever an Input Makes Up a Large Percentage of a Good's