Joint Supply Flashcards

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  • Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

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Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What is joint supply?

When two or more goods come from the same production process. Making more of one increases supply of the others.

Give two examples of goods in joint supply.

Beef and leather; butter and skimmed milk.

Why does a higher price for beef increase the supply of leather?

Farmers raise and process more cattle to sell beef. This also makes more hides, so leather supply rises.

On a supply diagram for leather, what shift happens if the price of beef rises?

The leather supply curve shifts right (outwards), because more leather is made at each price.

What is a by-product?

A secondary good made when a main good is produced. For example, leather from cattle for beef.

Can the supply of a by-product change even if its own price does not?

Yes. If output of the main good changes, the by-product's supply changes too.

What happens to the price of a by-product if its supply rises but demand stays the same?

It tends to fall, because supply rises while demand stays the same.

How is joint supply different from competitive supply?

Joint supply means more of one also makes more of the other. In competitive supply, the same resources make either good, so more of one means less of the other.

If the government taxes crude oil output, what happens to supplies of petrol and diesel?

They both fall, because both come from refining the same crude oil.

Can producers increase the supply of one joint good without also increasing the other?

Not easily. They come from the same process, so raising one usually raises the other too.