Competitive supply vs. joint supply

Competitive supply

The production condition where goods rely on the same resources, meaning an increase in the output of one requires a decrease in the output of another.

Joint supply

The production condition where two or more distinct goods are generated simultaneously from the same shared process or raw input.

Example of competitive supply

Corn and wheat cultivated on the same farmland, where dedicating more acreage to corn reduces the space available for wheat.

Example of joint supply

Beef and leather hides from cattle, where raising more cattle yields higher quantities of both co-products.

Price effect under competitive supply

A price increase for one good attracts shared resources toward it, causing a decrease in the supply of the alternative good.

Price effect under joint supply

A price increase for one good motivates higher overall production, causing an increase in the supply of its companion product.