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Difficulty: Very hardTypes of Supply

In Nigeria's agricultural sector, cattle rearing simultaneously yields beef and hides, whereas raw cassava tubers can be processed into either garri or industrial starch. If an expansion in livestock farming occurs alongside a major shift by processors toward industrial starch production, what will be the effect on the market supply of hides and garri?

  1. The supply of hides will increase, while the supply of garri will decrease.Answer
  2. B
    The supply of hides will decrease, while the supply of garri will increase.
  3. C
    The supply of both hides and garri will increase.
  4. D
    The supply of hides will remain unchanged, while garri experiences a movement along its existing supply curve.

Answer

The supply of hides will increase, while the supply of garri will decrease.
Beef and hides are by-products of cattle rearing, meaning they are in joint (complementary) supply; expanding livestock production inherently increases hide availability. On the other hand, garri and industrial starch rely on cassava as a shared input, placing them in competitive supply; diverting cassava toward starch manufacturing reduces the raw materials available for garri, shifting the supply curve of garri to the left (decrease in supply).

Step-by-Step Solution

1
Identify the type of supply relationship between beef and hides.
Beef and hides are produced together from cattle rearing, making them joint (complementary) supply goods.
An increase in cattle production automatically leads to an increase in the output of both beef and hides.
2
Identify the type of supply relationship between garri and industrial starch.
Garri and industrial starch compete for the same raw material (cassava), making them competitive supply goods.
Because the supply of raw cassava is finite, increasing the quantity allocated to industrial starch leaves less cassava available for garri processing.
3
Synthesize the simultaneous market effects.
Increased cattle farming shifts the supply curve of hides to the right (increase in supply), while reallocation of cassava to starch shifts the supply curve of garri to the left (decrease in supply).
Joint supply leads to parallel movement with primary production, whereas competitive supply creates an inverse production relationship between competing final uses.

Key Concept

Distinguishing between Joint (Complementary) Supply and Competitive Supply
Estimated Time:2m 0s
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Topics

Types of Supply

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