In an agro-processing factory in Kwara State where sugarcane is crushed to manufacture refined sugar, molasses is automatically yielded as a byproduct of the same production run. If an increase in consumer demand for sugar leads to a rise in its market price and output, the market supply of molasses will decrease because processing resources are diverted to sugar.
Answer: Answer
Answer
The statement is False. Sugar and molasses are in joint (complementary) supply, meaning an increase in the production of sugar leads to an increase—not a decrease—in the supply of molasses.
The statement is false because refined sugar and molasses exhibit joint (complementary) supply. When two goods are yielded together from a single production process, an increase in the production of the primary good inherently increases the total availability and supply of the secondary byproduct.
Step-by-Step Solution
Key Concept
Joint (Complementary) Supply vs. Competitive Supply