Prices of other products/outputs:

(i) Competitive supply products: Firms are not permanently committed to the production of particular products. Because firms have the objective of maximising profits, rising prices for other products could cause firms to switch to the production of these products. For example, if the price of soft

drinks were to rise sharply, breweries might switch form beer production to soft drink bottling. Such products are said to be in competitive supply. The same resources may be used to produce them.

(ii) Joint-supply products: These are products that are always produced together. One is seen as the by-products of the other. Examples are beef and hide. An increase in the price of say beef, which increase the quantity of beef supplied to the market, will automatically increase the supply of hides, from which leather products are made.