Primary input demand functions derived from the cost minimizing problem will have the form if j = 1,2,3 i,k = 1,2,3; if j = 4,5 i,k = 1,2 On the other hand intermediate demand functions will have the form Xij = zijXji, j = 1,2,3,4,5 (4) Consumers Demand for Products Consumers are assumed to choose their consumption levels of goods to maximize the Cobb-Douglas utility function subject to their budget constraint where U is the utility, Y is the household income,
Xjc is the households demand for commodity j, and [alpha]j is a set of positive parameters summing up to one.