Question 11
Theory of SupplyUse the diagrams to answer the question.
Commodities I and II are in
- A.competitive supply
- B.joint supply
- C.substitute supply
- D.derived supply.
Show the answer and explanation
Answer: B (joint supply)
Explanation
A rise in demand for commodity I raises its output, and at the same time the supply of commodity II increases. Goods produced together like this (e.g. beef and hides) are in joint supply.