Input Equations
These equations are for the supply and demand conditions in the agricultural input
markets. The first equation describes the demand for input i that is used in the
production of commodity j. As the price of input i, w, increases, less will be demanded.
Equation 1.6 says that the total demand for input i is equal to its demand by each
commodity. Equation 1.7 is the supply function for input i. As the price of input i
increases, the supply will also increase.
1.5 Xji = ∂Cj (•) /• wi derived demand for input i in industry j, for j = 1, . . . , J
and i = 1, . . . , I; where Xji is the quantity of input i
used in the production of good j.
1.6 Xi = ÂXj
j
1.7 Xi = gi ( wi )
total demand for input i, i = 1, . . . , I.
Supply of input i, i = 1, . . . I.
Equilibrium
This is the market equilibrium condition stating that demand equals supply of good
j. Supply is equal to production Y less exports E plus imports M.
1.8 Dj = Yj - Ej + Mj Market equilibrium condition for good j for j - 1, . . . , J;
where Ej is the quantity of good j that is exported and
Mj is the quantity of good j that is imported.
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