palm oil and palm kernel are in?

Analyze the question: We are asked what kind of relationship palm oil and palm kernel have in economics.

Concept:

• Joint supply occurs when one production process yields two or more products at the same time. Increasing the supply of one automatically increases the supply of the other. Examples: beef and hides, mutton and wool, cotton lint and cotton seed.
• Competitive supply is when goods use the same resources, so producing more of one means producing less of the other (e.g., maize and yam on the same farmland).
• Competitive demand is when goods are substitutes (e.g., Gala and sausage roll, or butter and margarine).
• Complementary demand is when goods are consumed together (e.g., car and fuel, bread and butter).

Solution:

1. Palm oil comes from the fleshy mesocarp (pulp) of the palm fruit.
2. Palm kernel comes from the nut inside that same fruit.
3. Both are obtained from the same source, the oil palm fruit, in one production process. When more palm fruits are harvested and processed, the supply of both palm oil and palm kernel rises together.
4. This is the definition of joint supply.

Checking the other options:

• B (competitive demand): They are not substitutes for each other. Palm oil is used for cooking, while kernel is used for kernel oil, cake and feed.
• C (competitive supply): Producing one does not reduce the other.
• D (complementary demand): They are not typically consumed together as a pair.

Answer: A. joint supply.

Exam tip: Ask yourself, "Do they come from the same source or process?" If yes, think joint supply. Remember the pairs: beef and hide, mutton and wool, palm oil and kernel.