Joint Supply

A commodity is in Joint Supply with another commodity when one commodity is provided for two diverse purposes.

For examples:

• Cows are provided for both leather and beef.
• An oil well may provide both gas and oil.
• Sheep can be used for milk products, meat, sheepskin and wool.
• Production of wheat delivers straw too, which ranchers, purchase for their stables.

For occasion, when need to raise the yield of wheat, the generation of straw will be naturally increased. So is the case with the production of beef and leather etc.

We partition joint supply into two different areas:

1. Items whose proportion can be changed. For examples in Australia and New Zeeland, it has been found conceivable to create lamb and wool fleece in variable extents by cross-breeding sheep. We are able to have a breed of sheep which surrender less mutton and more wool. or more mutton and less wool.
2. Items whose proportion cannot be changed. A rise within the yield of one product must essentially be accompanied by a rise within the supply of the other. For example, when the production of cotton is expanded, the overall amount of cottonseed will moreover increment naturally.

Economic theory

The Economic theory proposes that an increment in a request for one good in joint supply will lead to an increment in its price. It causes it to an increment the quantity supplied. The supply of the other good, subsequently, increments, driving to a drop in its price. Increment in a request for meat leads to an increment in price and amounts bought and sold of beef. More beef generation will lead, as a by-product, to a larger one supply of leather. The cost of leather will at that point drop and demand, bought and sold will increment.

Joint Demand

Certain items, particularly crude materials and components, are subject to joint demand. Joint demand happens when two or more things are utilized in combination to produce an item. Well-known cases of such a request happen within the case of commodities dependent on each other either in utilization or person generation.

Examples such goods:

• car and fuel,
• printer and ink cartridges
• coal and stove

Ordinarily, an increment within the cost of one will influence the demand for the other. For illustration, when the cost of fuel increase, request for cars will likely drop, in the event that ink cartridges ended up more costly, request for printers will likely decrease and vice-versa.

Examples of Joint Supply

• Fruits: Many fruits can be used either for culinary purposes or for making juice. Apples, oranges, pears, and pineapples are all examples of joint supply commodities.
• Cotton: Cotton is commonly used for both clothing and home furnishings. Cotton can be used to make shirts, pants, blankets, curtains, and more.
• Livestock: Livestock can be used as a source of food, such as beef and pork, or can be used for work, such as horses and mules.
• Timber: Timber is used for both construction and fuel. It is most commonly used to build homes and furniture, but it can also be used to produce heat and electricity.

Advantages of Joint Supply

Joint supply is a type of supply relationship in which two commodities are produced jointly and can be offered to the market as a single commodity. The following are some of the advantages of joint supply:

• Joint supply saves time and costs associated with producing separate commodities, as resources and labor can be shared.
• By producing a single commodity, producers can benefit from economies of scale resulting in lower production costs.
• Joint supply allows producers to market their goods as a single package, simplifying the selling process and potentially increasing demand.
• Joint supply can improve the quality of both commodities, as producers can use the same resources and labor to produce a higher quality product.
• Joint supply can help increase the liquidity of both commodities, as the combined product can be more attractive to buyers.

Limitations of Joint Supply

Joint supply has several limitations, including:

• Limited availability: Joint supply can be difficult to access in certain markets, as the two commodities may be produced in different locations and require separate processes to be provided together.
• Unstable pricing: Joint supply can lead to volatile pricing, as the two commodities often have different levels of demand and different production costs.
• Difficulty in forecasting: Forecasting the availability and pricing of two commodities in joint supply can be difficult, as their production and demand are often linked.
• Inflexibility: It can be difficult to adjust the supply of the two commodities if the demand for one is higher than the other, as they need to be provided together.

Other approaches related to Joint Supply

Other approaches include:

• Joint Demand - This approach examines the demand for two or more commodities that are affected by the same factors. For example, if the demand for apples and oranges increases due to a rise in income, then this demonstrates joint demand.
• Joint Production - This approach examines the production of two or more commodities that are produced together or require similar inputs. For example, if wheat and corn are produced together, then this demonstrates joint production.
• Joint Consumption - This approach examines how two or more commodities are consumed together. For example, if people consume apples and oranges together, then this demonstrates joint consumption.

In conclusion, joint supply is just one of the approaches used to identify and evaluate the relationships between commodities. Other approaches include joint demand, joint production, and joint consumption.

Joint Supply — recommended articles

Joint demand — Prestige products — Veblen effect — Normal good — Monopson — Wholesale price — Free competition — Exclusive distribution — Change In Supply

References

• Anderton A.(red)(1995), Economics, Pearson Education India, India
• Hirschey M.(red)(2008), Fundamentals of Managerial Economics, Cengage Learning
• Palgrave R.H.I.(red)(2015), Dictionary of Political Economy, Tom 3, Cambridge University Printing House, Cambridge
• Pride W.M., Ferrell O.C.(red)(2014), Foundations of Marketing, South-Western Cengage Learning, Mason
• Wicksell K.(red)(1934), Lectures on Political Economy (Routledge Revivals), Routledge

Footnotes

Author: Monika Kromka