TYPES OF SUPPLY

Supply refers to the number of goods and services that a seller is able, willing and ready to sell at a particular point in time and a given price.

The following are the five major types of supply:

1. Joint supply: This is a type of supply that occurs when commodities are produced together in the same production process or from the same source such that the increase in the production and supply of one will automatically lead to an increase in the production and the supply of the other(s). 

Joint supply can also refer to a production process that can yield two or more outputs.

For example, palm oil and palm kernel oil are jointly supplied because they come from the same source: palm trees.

Joint supply also arises as a result of the creation of a by-product when producing a good.

When we kill sheep for their meat (mutton), for example, we acquire a by-product (wool)

2. Composite supply: This type of supply occurs with commodities with an alternative or multiple uses.

In other words, composite supply occurs when more than one product can be obtained from the same factor of production.

If one commodity can serve two purposes, such that the use of the commodity for one purpose decreases the use of the commodity for another purpose, the commodity is said to have a composite supply.

One feature of composite supply is that if supply to one use is increased, supply to other uses would fall.

That is, an increase in the supply of one of its uses will reduce the supply for other uses

For example, increasing the usage of land for the building would reduce the amount of land available for farming

As another example, an increase in the use of land for planting yam would automatically be reduced land for planting cassava.

3. Competitive supply: This refers to the overall supply of various commodities which satisfy the same basic wants.

For example, the overall supply of beverages such as tea, coffee and cocoa drink, seeks to satisfy the consumer's desire for beverages.

Commodities in competitive supply are substitutes that compete with one another.

4. Individual supply: This is the supply of an individual firm or producer at different prices.

It refers to the number of goods and services that a supplier is willing and able to sell at various prices. 

It is the total quantity of goods and services offered for sale in the market by a producer over a specific period and at various prices.

Individual supply is affected by factors such as cost of production, availability of inputs, technology etc.

To illustrate, the number of pens sold by a supplier in a market in a month will constitute the individual supply of pens for the supplier for that month

5. Market supply: This is the aggregate supply of goods and services in a market for a given period by different suppliers

Alternatively, market supply can also refer to the horizontal summation of all individual supplies in a market.

For example, suppose there are five suppliers in a market who each sell 400 pens, 300 pens, 250 pens, 150 pens, and 100 pens over a month. 

It follows that the monthly market supply for pens is 1200 pens.

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