Joint Supply
What is Joint Supply?
Joint supply is the simultaneous output of two or more products from a single process or material.
How Does Joint Supply Work?
Products that are generated in joint supply cannot be produced independently from one another. For this reason, joint supply outputs increase in direct relation to the size of the raw material supply.
For example, the refinery process for crude oil yields petroleum as well as paraffin, lubricants and the chemical bases plastics. A rise in the supply of crude oil results in a commensurate rise in the supply of petroleum, paraffin, lubricants, etc.
Why Does Joint Supply Matter?
In joint supply, a production increase in response to a rise in demand for one output results in a commensurate rise in the production of all other outputs. As a result, the prices of the accompanying outputs decline if there is no change in the demand for them.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
