In economics, joint product is a product that results jointly with other products from processing a common input; this common process is also called joint production.Wouters, Mark; Selto, Frank H.; Hilton, Ronald W.; Maher, Michael W. (2012): ''Cost Management: Strategies for Business Decisions'', International Edition, Berkshire (UK), p. 532. A joint product can be the output of a process with

fixed Fixed may refer to: * ''Fixed'' (EP), EP by Nine Inch Nails * ''Fixed'' (film), an upcoming animated film directed by Genndy Tartakovsky * Fixed (typeface), a collection of monospace bitmap fonts that is distributed with the X Window System * Fi ...

or variable proportions.

Examples

* The processing of

crude oil Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring u ...

can result in the joint products

naphtha Naphtha (, recorded as less common or nonstandard in all dictionaries: ) is a flammable liquid hydrocarbon mixture. Generally, it is a fraction of crude oil, but it can also be produced from natural-gas condensates, petroleum distillates, and ...

gasoline Gasoline ( North American English) or petrol ( Commonwealth English) is a petrochemical product characterized as a transparent, yellowish, and flammable liquid normally used as a fuel for spark-ignited internal combustion engines. When for ...

jet fuel Jet fuel or aviation turbine fuel (ATF, also abbreviated avtur) is a type of aviation fuel designed for use in aircraft powered by Gas turbine, gas-turbine engines. It is colorless to straw-colored in appearance. The most commonly used fuels for ...

kerosene Kerosene, or paraffin, is a combustibility, combustible hydrocarbon liquid which is derived from petroleum. It is widely used as a fuel in Aviation fuel, aviation as well as households. Its name derives from the Greek (''kērós'') meaning " ...

, diesel, heavy fuel oil and

asphalt Asphalt most often refers to: * Bitumen, also known as "liquid asphalt cement" or simply "asphalt", a viscous form of petroleum mainly used as a binder in asphalt concrete * Asphalt concrete, a mixture of bitumen with coarse and fine aggregates, u ...

, as well as other petrochemical derivatives. The refinery process has variable proportions depending on the distilling temperatures and cracking intensity. *

Cogeneration Cogeneration or combined heat and power (CHP) is the use of a heat engine or power station to generate electricity and useful heat at the same time. Cogeneration is a more efficient use of fuel or heat, because otherwise- wasted heat from elec ...

delivers the joint products of heat and power; trigeneration provides cold, heat and power. With extraction steam turbines, cogeneration has variable proportions; with an internal combustion engine the proportions of heat and power are fixed. * In a

blast furnace A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally pig iron, but also others such as lead or copper. ''Blast'' refers to the combustion air being supplied above atmospheric pressure. In a ...

, joint products are

pig iron Pig iron, also known as crude iron, is an intermediate good used by the iron industry in the production of steel. It is developed by smelting iron ore in a blast furnace. Pig iron has a high carbon content, typically 3.8–4.7%, along with si ...

slag The general term slag may be a by-product or co-product of smelting (pyrometallurgical) ores and recycled metals depending on the type of material being produced. Slag is mainly a mixture of metal oxides and silicon dioxide. Broadly, it can be c ...

and

blast furnace gas Blast furnace gas (BFG) is a by-product of blast furnaces that is generated when the iron ore is redox, reduced with coke (fuel), coke to metallic iron. It has a very low heating value, about 3.5 MJ/m3 (93 BTU/cu.ft), because it consis ...

. The iron is a precursor of

steel Steel is an alloy of iron and carbon that demonstrates improved mechanical properties compared to the pure form of iron. Due to steel's high Young's modulus, elastic modulus, Yield (engineering), yield strength, Fracture, fracture strength a ...

, the slag can be sold as

construction material This is a list of building materials. Many types of building materials are used in the construction industry to create buildings and structures. These categories of materials and products are used by architects and construction project manager ...

, and the gas is used to reheat Cowper stoves. With variable process parameters of the iron smelting, the proportions are slightly variable. * The

chloralkali process The chloralkali process (also chlor-alkali and chlor alkali) is an industrial process for the electrolysis of sodium chloride (NaCl) solutions. It is the technology used to produce chlorine and sodium hydroxide (caustic soda), which are commodi ...

, one of the basic processes in the chemical industry, is the electrolysis of sodium chloride (common salt) providing the joint products

chlorine Chlorine is a chemical element; it has Symbol (chemistry), symbol Cl and atomic number 17. The second-lightest of the halogens, it appears between fluorine and bromine in the periodic table and its properties are mostly intermediate between ...

sodium hydroxide Sodium hydroxide, also known as lye and caustic soda, is an inorganic compound with the formula . It is a white solid ionic compound consisting of sodium cations and hydroxide anions . Sodium hydroxide is a highly corrosive base (chemistry), ...

and

hydrogen Hydrogen is a chemical element; it has chemical symbol, symbol H and atomic number 1. It is the lightest and abundance of the chemical elements, most abundant chemical element in the universe, constituting about 75% of all baryon, normal matter ...

. Due to the molar relation in the chemical equation, the proportions are fixed.

Joint product pricing

microeconomics Microeconomics is a branch of economics that studies the behavior of individuals and Theory of the firm, firms in making decisions regarding the allocation of scarcity, scarce resources and the interactions among these individuals and firms. M ...

, joint product pricing is the firm's problem of choosing prices for joint product, each of which is considered to be of value. Pricing for joint products is more complex than pricing for a single product. To begin with, there are two demand curves. The characteristics of each could be different. Demand for one product could be greater than for the other. Consumers of one product could be more price elastic than consumers of the other (and therefore more sensitive to changes in the product's price). To complicate things further, both products, because they are produced jointly, share a common marginal cost curve. Their production could be linked in that they are bi-products (referred to as ''complements in production''), or produced by the same inputs (referred to as ''substitutes in production''). Further, production of the joint product could be in fixed proportions or in variable proportions.

References

{{Econ-stub Pricing Production and manufacturing